Profit taking kicked into a higher gear today as market participants sought to lock in gains in this extended market. Shark HQ was relatively quiet and boring as we have been selling ahead of this decline and did very little today. Volume was higher than the pre-holiday Wednesday and shortened trading day on Friday, but right in line with last Monday and Tuesday, indicating normal consolidation. Furthermore, not a sector finished in the green which also indicates pure profit taking with the alternative being a shift into defensive positions such as gold or oil.

Overall the market action doesn’t concern us and in fact bodes well for the future. The market had clearly gotten too euphoric and the party lasted into the wee hours without a single blip in the action. Mr. Market is generous, but he isn’t that generous. What we will watch and listen for now is the skepticism to creep back into the market. We need an element of uncertainty in order to shake out weak holders and set us up for another move higher. For now we must wait and be patient as many extended stocks sell off and fall back to proper levels. For those who have followed our lead and are now sitting with increased cash levels it will be very important to not become anticipatory to a turn in the action. Should the selling continue one can not re-enter stocks simply because they are trading lower than they were a couple weeks ago. It is too early to tell what the future will hold but for now we will simply say that Mr. Market is taking a healthy and much needed break.

Have a good evening.

RevShark