It wasn't a key reversal day by any stretch of the imagination, but the indices did falter a little today. The DJIA still managed to stay positive but the other indices were in the red and breadth was 3100 gainers to 3750 decliners. Most notably the FAANG names reversed and Apple (AAPL) lagged.
Given how strong this market has been lately it is entitled to some rest. In fact it would probably be bullish if it pulled back and rested even more. We need to alleviate these overbought conditions so that there is a foundation for another move higher.
The question now is whether this slight pause will lead to a little more choppiness as the positive hysteria cools. There is still very strong support but the selling today was a gentle reminder that the market don't go straight up forever.
With a huge amount of earnings reports hitting in the next few weeks that will be the main focus of the markets. The potential for some 'sell the news' action is high but it is not yet a theme that has developed. Keep an eye on the chip sector and Lam Research (LRCX) which just reported. If this group loses its balance it will be a bad omen.
It was much narrower today but there were some stock picks working. Manage those stops carefully. The best market timing indicator is your P&L. If you are losing money that is a major clue that you need to do something. I'll expand on that point more later.
Have a good evening. I'll see you tomorrow.