The market was due for some profit-taking after the melt-up Tuesday, and that is what we had, although it was well camouflaged by strength in Apple (AAPL), IBM (IBM) and a couple of other index heavyweights.
The small-cap indices lagged and more accurately reflected the poor breadth of 1600 gainers to 4000 decliners. The most notable action other than small-cap weakness was a spike in bond yields and very poor action in precious metals. Retailers managed some minor green at the end of the day but there was very little upside leadership other than AAPL.
The market certainly deserves a rest after the recent run and, as I've been discussing, there is no reason to anticipate a sudden collapse. In fact, markets that act like this have a tendency to stay sticky to the upside. If they do roll over, it takes time before sentiment shifts and selling accelerates.
We have to let the consolidation play out and let charts set up as short-termers move out and stronger hands move in as opportunities develop. There aren't many great patterns out there, but that can change quickly with a few days of rest.
Have a good evening. I'll see you tomorrow.
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