What To Look For On Pullbacks

Leading stocks working pretty well.

That’s what good markets are made of. BUT…I
believe things are ahead of themselves here on a short-term basis. In case you
don’t know, this is not going to be a runaway market. There is just too much
bear market resistance to work through. That will take time. As of this second,
I expect a pullback. Many stocks are stretched from moving averages. That almost
always resolves itself with a drop. Unless things change, pullbacks would be
buyable. On any pullback, look to see if volume is heavy and look to see if
leaders start to gag. At that point, you may have to start thinking differently.

On the sentiment front, a bit of good news. Bullish advisors dropped markedly
from over 50% to 42.7%. I want to see lower but it is a good start. Other
shorter-term measurements outlined in past reports remain worrisome as no one is
betting on a drop here…which once again…almost always means we are going to
get one. 

Keep watching the NEW HIGH LIST for high volume breakouts as well as good
reactions to recent earnings reports.