If you can’t stand the heat, get out of the kitchen.

 

This pretty much sums up today’s action as the market was hot all day. It looked downright giddy as it continuing to tack on solid gains with good breadth, decent leadership and solid volume. Just when the party looked as if was going to start really rocking into the New Year, there were second thoughts about what they were doing and all of a sudden it was a mass move toward the exits. There were quite a few ugly reversals especially in some of the big momentum movers however many individual charts held key technical levels and the major indices came into the close in the green.

 

The two major players who have been jockeying for leadership continued to battle it out today as both the Semi’s and Gold led. We watch this battle closely as a healthy market poised for broad moves higher should not be led by a defensive position such as gold. We have mentioned on several occasions that the action in Gold and Oil was worth noting but not of major concern at this point. We continue with this thesis but after today, the whispers from these defensive sectors are starting to become a bit louder.

 

On the bright side today’s reversal may have shaken out those who have been starting to get a little cocky. Bringing a bit of uncertainty back into the market is something that is always a variable in a sustained move higher. We welcome the naysayers and should this market hold its ground setting up for another move higher, we will gladly purchase their shares as they triple sell first and do the research later.

 

For now we chalk up today’s move to some profit taking and holders attempting to protect gains after the first sign of weakness. We note some of the small warning signs but won’t look too far or over analyze too much. This market is strong and until key levels break, we won’t call it anything else.

 

Have a good evening