The indices are down slightly and breadth is running negative with about 2,900 gainers to 3,700 decliners. New 12-month highs are down to around 80 while new 12-month lows are about 20.
This is looking like some routine consolidation after a frisky three-day run. There is an inclination on the part of the bears to become overexcited at the first signs of weakness after a run like this. That is understandable when they have been fighting the trend.
It is important to keep in mind that the odds favor trading range action rather than a collapse. Even if you do think that a downtrend is likely to emerge the safer course of action is to assume, initially, that support levels will hold.
The S&P 500 can afford to give back a pretty good chunk here without doing any technical damage. It still may be prudent to lock in some gains and to keep stops tight but there isn't anything overtly negative threatening right now.
One name I'll be watching after its latest earnings report is Pareteum Corp. (TEUM) . Over the last four quarters the company has seen revenues increase 47%, 85%, 129% and 256%, respectively. Accelerating revenue growth is going to attract attention and is one of the best predictors of price momentum.
Pareteum is a holding in TheStreet's Stocks Under $10 portfolio. Click here to learn more about this portfolio, trading ideas and market commentary product.