After the post 4th of July consecutive all time high performance, we were alerted to the possibility that the market was ready for a pullback. Furthermore, based on the market breadth we were also made aware this pullback will not be the 10% type of correction many talking heads have been waiting for.
As we start the new trading week with the market pulling back with some vengeance, many market participants fear this is the beginning of the long awaited 10% correction. But from the charts, they show the market is still very resilient and still on an uptrend. Until major support is broken, the new high territory for many of the market indices is still in play. One should refrain from shorting this market until it has indicated a top has been made. If one is uncertain, move to the sideline and wait for a clear signal from the market. Otherwise, continue to trade defensively as the market is hovering near all time high territory.
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