Stalled. That's what I regard us as.
Stalled because of the transports, which have turned hideous. Stalled because of the banks, which keep succumbing to profit-taking and downgrades after every microscopic move upward. Stalled because of the endless chatter about how nothing's getting better as stock prices advance. They are leaving the station without a locomotive pulling them.
Me? I don't see it that way. To me today's about AutoNation (AN) and KB Homes (KBH) -- autos and housing. Both the strength in AutoNation, courtesy of a brokerage house talking about the amazing auto market, and the resurgence of KB Homes, courtesy the phenomenal order growth and profit-predictions from this morning's earnings release, show me that the main bullish themes are still very much in play and on track.
Sure, I would feel better if the transports were going higher. FedEx (FDX) has fallen below where it first preannounced. Norfolk Southern (NSC), as predicted, is breaking down, taking the rest of the complex with it. I never ignore Dow Theory, even as I don't think anyone thought that coal, the chief cargo of the rails, would ever go into such a precipitous secular decline.
I think it's been a long and hard but good week. I think that profit-taking is in keeping with the preannouncements.
But you can't always get what you want. Sometimes you get what you need -- like a pause in the rally to regain our bearings and shake out the faint of heart.