Markets attempted to claw back as much as Monday’s losses as possible Tuesday. The S&P 500 did the best job of it recapturing almost all of Mondays .7% drop. Today it rose .6%. The same could not be said for the Nasdaq which lost 1.3% on Monday and was unable to recoup even half of that drop on Tuesday rising .6%. Volume on todays rebound was not as enthusiastic as one would like to see. We decided to go into cash today, as we reviewed the hundreds of charts that we do each night. The damage done to some of the leaders in the strongest groups was alarming. Could be be wrong? Of course we can and we will be wrong plenty of more times in the future. Names in the retail space like a FIVE down 8% in the last couple sessions. Other like GIII down 6% and AMZN UA SKX all dropping in the neighborhood of 4% Monday. This group has been on the rebound and you want to see it continue to behave bullishly. Some chips names had a rough Monday. AMBA was off 8% Monday, OVTI by almost 13%. Leading airline play ALK gave up nearly 7% Monday as well. These are all leading groups and to see some of the generals wounded may just be some temporary and prudent pausing, but with the market at lofty levels we decided to exit for the time being. Let us gather our stamina and opportunities will always present themselves. For the time being it felt like the seagull floating in the ocean looking serene. However under the surface its feet were thrashing like crazy. Perhaps thats what lagging fund managers are feeling and we will step aside and see how this all plays out.
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