Relax, the Market Is Just Digesting

 | Sep 14, 2017 | 4:11 PM EDT
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After big gains on Monday and Tuesday the indices consolidated on Wednesday and Thursday. Action was mixed with breadth running slightly negative, but there have been some strong pockets of momentum. The action has had a positive bias even though it has been quite mixed.

As I mentioned in my previous post, there has been some aggressive action in sector stocks in the biotechnology and China groups. However, there are other things doing well also, like my Stock of the Week, Square (SQ) , which broke out on good volume.

There were over 300 new highs today and no real signs of a rush to sell. The weak spot has been Apple (AAPL) , which is still dealing with a "sell the news" reaction to its new-products announcement. Some of the other FAANGs have also been weak, which caused pressure on the Nasdaq, but biotechnology and China names have made up for it elsewhere. (Apple is part of TheStreet's Action Alerts PLUS portfolio.)

Once again, there is a late buy program taking the indices off the lows. The indices may not look that buoyant but the overbought conditions are being relieved and the action in individual stocks is quite healthy.

There is no reason to believe this slower pace of gains is an indication of a top. It is just some healthy digestion after a big move.

Have a good evening. I'll see you tomorrow.

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