The S&P 500 slipped 0.15% Thursday, ending a four-day winning streak.
After rallying 150 points over a handful of days, it shouldn’t surprise anyone the market wanted to take a breather. And as far as breathers go, -0.15% doesn’t really count, so expect prices to slip a little further over the next few sessions.
Headlines remain benign, but a rebound that didn’t need a headline to kick it off doesn’t need a headline to take a step back. Stocks go up, and stocks go down; that’s all this is.
As I told readers on Wednesday:
[T]his is a better place to be collecting our 3x ETF profits than adding new money. By the time it looks safe, it is usually too late to buy…Now, don’t get me wrong, I’m not predicting a return to recent lows under 4,400. But everyone knows the markets move in waves, and after a nice bit of up, we need a little down.
This isn’t rocket science, but apparently, Wednesday’s tardy buyers missed the memo. But without late money, we’d have no one to sell our stocks to and give us our profits. So thank them for that.
As for what comes next, expect a little more cooling off over the next few sessions. For the most aggressive, they can short any incremental weakness but keep positions small and profit targets close. Shorting an uptrend is one of the hardest ways to make money in the market, and it requires impeccable timing.
For everyone else, wait for the dip back to 4,450 support and see what happens. If prices bounce, buy that bounce with a stop under this level. If the selling continues, wait for a bounce off of 4,400. Rinse and repeat.
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