Monday’s early morning rally only lasted half an hour. The indices, and many individual stocks, got repelled by those ‘war rally’ highs. From a technical perspective, there are a few reasons to be cautious at this juncture. Practically all of the leading stocks (the only ones I care to buy) are hovering near their upper Bollinger Band. That same group of stocks have stochastics in overbought territory. In fact, a lot of those stochastics flashed a sell signal yesterday. I’m also starting to see some bearish candlestick patterns in the charts. Yesterday there was a good number of Shooting Stars and Doji. So I continue to look for a buyable dip to provide some new stocks to buy.
