The Market is Set for Weakness to Follow Through

Yesterday we advised that failed new highs in the indices could lead to some selling pressure and we saw that into the close today. Whether this selling was protective in nature in front of tomorrow’s employment report or the response to other stimulus doesn’t matter. Clearly the market is braced for bad news.

We saw signs into the close that selling could be a multi-day affair. The stock that is the clear current leader, Amazon.com (AMZN) staged a reversal on volume. While not ominous this stock hasn’t touched its 20 MA since it launched its break out October 23^rd. A betting man would lay odds it has such a rendezvous in its future.

But until we see serious selling and the thinning leadership cracking we will maintain that holding profitable existing positions and searching for proper entry in correcting leadership stocks remains the best course.

In the meantime we have posted on our politics blog, a rare event in itself, usually inspired when our passion is stirred on one burning issue or another. Today’s entry is a defense of our beleaguered Fed chairman. We invite readers to have a look.