Chart Spotlight

As we mentioned yesterday, the NASDAQ leaders finally broke down last week, as you can see from the charts of Apple and Google. It is my experience that breaks like these often tend to have follow-through. I find these leading stocks will tend to join the fallen, as opposed to reaching down and picking them up.

What adds to our concern is the vulnerable look of the strong sectors in the commodity arena, especially the oil and gold stocks. You can see both these sectors are still near their highs, but the MACD (moving average convergence divergence, sorry for the jargon) are not confirming these highs as they have begun to head lower. This type of divergence is one of the better indicators in my tool box. My sense is that these sectors may star breaking down as well.

Did You Know…

OVERLOAD - As the 78 million individuals defined as “baby boomers” (i.e., persons born between 1946-64) enter their retirement years, an estimated 10,000 Americans a day will become eligible for Social Security benefits over the next 20 years (source: Social Security) Have not heard much about reform lately?.

Final Thought

“When the stock market has this vulnerable look to it, we would rather be wrong holding cash than wrong holding stocks” - Yours Truly