The major indices managed another positive day of action but momentum slowed a little as even the bulls are wondering how much longer this winning streak can last. Breadth showed to about 3150 gainers to 3700 losers and the big cap and FAANG names -- Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) and Alphabet (GOOGL) -- that led yesterday failed to follow through today.
The pockets of wild momentum have slowed substantially but there were still some very good movers like Xunlei (XNET) , Gridsum (GSUM) and Sarepta Therapeutics (SRPT) ,but it was much narrower. We even had a weakish close for the first time this year.
Given how technically extended everything is this isn't particularly surprising, but the more important question is whether this is just a pause that refreshes or a warning sign of a deeper pullback?
It has typically been a mistake to become too defensive too fast as the market seems to shrug off any dips quite fast, but our job as momentum riding bulls is to stay vigilant and be ready to react if market conditions change.
If you aren't at least a little nervous about how euphoric this market has been then you haven't been paying attention. The hardest thing to do in a market like this is to ride the momentum to the bitter end, however it can be the most profitable thing you can do if you are riding the right horses.
Have a good evening. I'll see you tomorrow.