For the second straight day, the major indexes stalled closing just below yesterday’s final mark. While we haven’t seen definitive signs of a top (short-term or long-term), it does look like the momentum is gone and volume is turning bearish.
One thing that definitely looks like a possibility is another pullback. There are four visible on the chart above and it is a move that we are all becoming used to.
Now don’t get me wrong, there is nothing wrong with a pullback — it is something that is quite necessary for a healthy, long-term rally. My problem with the pullbacks we have been seeing in this market is that they are so often and there is very little “new” advancement. What I mean by “new” is that it is in new high ground above the previous top.
I’ve said it before and will say it again: these pullbacks are institutional profit-taking and more importantly, liquidation of positions that will ultimately cause a final top and new down-trend.
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