The dramatic rise in equity prices since mid-October's correction bottom appears to be losing its upward momentum. With the Dow having risen 9% in a matter of weeks, the markets need another catalyst to move higher. Earnings are largely in the books and came in much better than expected, a key reason why this market has climbed to new highs.
The Industrials are pictured below and as you can see, the faster-reacting black moving average in the MACD indicator is beginning to roll over. Relative strength is also towards the upper bound indicating that buying pressure may be waning.
The setup is nearly identical in the broader S&P 500, shown below.
Depending on your investing style, moments like this can be opportune for doing a little profit taking. In a primary bull market, which we're still in, you would never want to liquidate all your positions, but selling into strength so that you can ... Log in or subscribe to continue reading.