After Thanksgiving, the market opened for an abbreviated trading session and it stayed in the green for most of the session until near the close. Near the close, the DJIA, SP500 & DJT reversed and gave back all the day’s gain plus more. These three indices closed with a loss while the Nasdaq 100 and the Russell 2000 closed at another new high.
Looking at the market breadth, it is clear this market is extended. But calling a market top is a bit premature, the market tops out when the DJIA tops out. Until the market has clearly indicate it has topped, continue to trade what you see and do not go chasing after a running train because the next stop could be the end of the line.
NYSE Breadth:
Nasdaq Breadth:
One more thing, institutions will never be holding the bag, it is always the main street guys. It’s the golden rule; “One has the gold, makes the rule.” Therefore, the music will stop when the big money said it has stopped. Having the main street investors being skeptical about this market rally is a good thing. It is when this group of investors get euphoric is when the market should be weary.
