The market is finally undergoing some consolidation after a five-day parabolic. The indices are still holding steady but breadth is slightly negative and the pockets of momentum have cooled substantially. Even all the big caps and FAANG names that ran up so strongly yesterday have failed to follow through.
As I wrote in my opening comments, the best way to deal with this market is to stay focused on your individual positions. They will be the canary in the coal mine that will help you determine if you should be cutting your long exposures.
The good news about this action is that we badly need it if we are going to build support for another thrust higher. With earnings season on the horizon a little corrective action now would make for an attractive setup for some good reports. If there isn't some correction then you can bet the phrase 'sell the news' will be shouted loudly by the bears.
The key thing to do now is to monitor the action, manage positions and keep on digging for new setups. I've made few new buys today but am eyeing Gridsum Holdings (GSUM) which is challenging resistance at the 200-day SMA around 9.75.
I'm rooting for the bears to score a few points here because it will make for a better setup going into earnings season.