Pullback Begins...
The US market pulled back last Friday as this over extended market runs out of steam at last. The Dow closed down by 37 points, the Nasdaq composite closed down by 16 points and the S&P500 closed down by 5 points. Of course, one negative day doesn't say much but such a significant negative day occurring at such a peak does make it a lot more dangerous than "just a negative day".
The pullback that I am talking about here isn't the kind of long drawn kind of pullback but rather a quick short term one week pullback to digest the short term overbought condition in order for the market to continue higher in a healthy manner. I am not predicting a market top here. This recovery market has a lot more to go before it hits the next top. In fact, what I am suggesting here is a possible entry point following the coming short pullback, so please don't interpret this negatively.
It is going to be a relatively quiet week ahead with the turbulent FOMC + Quad witch week behind us. The big number this week is the GDP 4th quarter estimate on Friday (see Stock Market Calendar).
For now, the Dow remains in all out bull trend.
The pullback that I am talking about here isn't the kind of long drawn kind of pullback but rather a quick short term one week pullback to digest the short term overbought condition in order for the market to continue higher in a healthy manner. I am not predicting a market top here. This recovery market has a lot more to go before it hits the next top. In fact, what I am suggesting here is a possible entry point following the coming short pullback, so please don't interpret this negatively.
It is going to be a relatively quiet week ahead with the turbulent FOMC + Quad witch week behind us. The big number this week is the GDP 4th quarter estimate on Friday (see Stock Market Calendar).
For now, the Dow remains in all out bull trend.
posted by Jason Ng at 6:02 PM
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