Not surprisingly the market couldn’t build on yesterday’s rally. As I mentioned yesterday, the market’s in overbought territory and at the top of the trend channel — ripe for profit taking. But there wasn’t a lot of damage done today, as the indices gave up about a third of yesterday’s rally. The S&P actually had a distribution day today, but it still sits above its November highs. My stochastic indicators are flashing sell signals and I think it’s wise to let the market cool off a bit before jumping back in on the long side.
