Consolidating.....

We faltered in the final hour of trading, but once again, it was a day of floating high on nothing but a lot of air. Volume was light, breadth was around flat, and the indices had only minor losses. Given how extended this market has become over the past ten days, the selling was pretty mild. We remain quite extended on light volume, with some technical overhead to deal with. At a minimum, the market needs to consolidate some of the recent gains to build a foundation from which to move higher. Although recent evidence suggests otherwise, even strong markets need to rest once in a while and allow stock to rotate into stronger hands. The higher we go without a rest, the greater the risk of a sharp selloff. 

We have an unusual number of stocks that have made parabolic moves and plenty of others that have run into resistance. That doesn't mean they can't keep running straight up, but the odds for the shorts are getting better every day. Both bulls and bears would be better off if this market pulled back, but the market beast seldom does what is in our best interests........