Wednesday, December 17, 2008

Profit Taking Underway Then More Rallying toward 950; Dec. 17, 2008

Nothing interesting on the charts this morning. Today we appear to be seeing some profit taking from yesterday's surge higher. Most people are too nervous to hold stock for a long time so when big gains occur, they tend to sell. This is actually a contrarian indicator and tells me that a top is not in. Once people get complacent and very optimistic and hold stocks longer, that's when a top is forming. Also, it's good to note that despite the declines today, breadth is not too bad with only 59% of volume to the downside and 1.26 decliners to advancers. So no heavy selling across the board is occuring today; just light profit taking.

Once this correction is complete, look for the market to shoot higher.

1 comment:

Michael K. said...

Oh, thanks for the heads up Todd, I feel much better now because I brought a stock on Monday with unsettle fund, and I can't sell it until tomorrow because it will be consider free-riding. Now I can take some nap instead of staring at the chart all day