By: Marc Sperling of T3Live
This market has had almost two weeks of consecutive gains. With the Fed decision this afternoon I wouldn’t be surprised to see a small pullback or some digestion. It is important to remember that pullbacks in bull markets are normal and healthy.
After the big run in the S&P with many positions potentially showing profits traders may be wise to lock in some gains or put definitive trailing stops in place. Yesterday, we saw all the money going into the S&P generally but not the key stocks we watch. Early in day typically leading stocks stopped making new highs while the broader market kept rising. This was the first real sign that a rest might be in store for us.
To be clear, I certainly wouldn’t be getting net short at this point in time. I am only looking to hedge off some risk in my portfolio and lighten up on longs. I will be watching closely for signs that market is really beginning to weaken. This would usually play out with leaders starting to see significant selling pressure. We are not there yet, but be flexible enough to play both sides.
