Option Investor
Printer friendly version
The techs and small caps got most of the lovin' this morning while the blue chips have come up a little short in the race for higher highs. This excessive exuberance for the higher-beta stocks, without a stronger participation by the blue chips, is something we've seen before at previous tops. It doesn't mean a reversal today or tomorrow (in fact a positive close for month end today and then a good close for the week tomorrow could be on the agenda) but it is a potential warning.

The DOW's inability to break above 8300 remains a warning flag for now. The bounce in the banks over the past 2-1/2 days looks like a correction of Monday's decline. Follow the money if they start to break down again. At this point I'd say caution is warranted by both sides as I think the rally could reverse at any time but shorts haven't had much luck lately and it's not a bad idea to wait for confirmation of a high (taking out yesterday afternoon's lows would be a start).

Market Monitor Archives