The buying pressure has finally relented a bit and we have some much needed consolidation taking place. Oil is pulling back, but breadth is still quite healthy. One of the more notable sector moves is in gold. Gold has shown a much stronger inverse correlation to the indices lately, and we are seeing that occur again today.
With the very-important monthly jobs news tomorrow, it is likely that we stay pinned down. There are going to be some concerns that a big report will result in more hawkish comments from the nattering nabobs at the Fed. The market has rallied in large part because it felt like the Fed had finally started to embrace the same view of the economy as the market, but the jobs news could cause another disconnect.
Once again, we are seeing the power of momentum, which is keeping a bid under this market. While there may be some very good bearish arguments, they are offset by the need for relative performance. The price action just isn't supportive of the bears right now, which means there is little choice but to continue to look for long vehicles.
I'm still holding a relatively small ProShares UltraShort S&P500 (SDS) position, and won't add until I see the breach of some support levels in the indices. Just taking out yesterday's lows would be a start.
My long inventory continues to decline as I sell into strength. I'm keeping an eye on Pure Storage (PSTG), which was the victim of a "sell the news" reaction to a very good earnings report. The stock had gone straight up into the news, and when the opening gap up didn't hold, it triggered some panic selling. I've averaged in a little and will continue to look for some entry points as it develops.