While today’s action was choppy, slow and mundane, it is exactly what the doctor ordered. We have been cautioning subscribers lately about the consolidation that we felt was needed in order to reaffirm our optimism and stabilize the recent gains before going higher. Today we saw a hint of this and are quite pleased with how the market action is playing out.

While it is nice to have daily 100 point moves in the Dow and the small
caps rocketing to the moon, a healthy market simply does not act this way. Instead, a sound and advancing market often moves in stages, at times even distributing a dose of fear in order to shake out weak holders. Stocks that have moved out base near highs, or retreat on  light volume, offering investors proper entry points for additions or remounts.

Volume was light today, and while breadth was negative it wasn’t enough to severely damage the moves we have seen throughout November. We would actually prefer to see this action continue this weak, maybe even dipping a bit in order to strike some fear in those who are starting to feel as though they control Mr. Market.

At Shark HQ, we are doing a few quick trades and tracking some interesting stocks. We are also pairing back some stocks in which we have solid gains and are extended but are redeploying capital in stocks offering less risk. We will continue to let winners run and will try not to become overly anticipatory about the end of this rally.

For now we continue to enjoy what Mr. Market is giving us but won’t become too comfortable in thinking that the party will never end. 

Have a good evening.

RevShark