While the Dow Industrials and the SP500 got the coverage today, most of the other indexes are lagging and some significantly. The IWM and SMH are more than 5% below their rally highs while the Dow made a new rally high today. The financials and the transports are also lagging. The above chart shows that the IWM is at median line channel resistance and approaching its broken trendline for the March to October rally. The upmove in the IWM has been on declining volume which doesn't confirm the breakout in the Dow. Perhaps these lagging indexes will play catch up, but it seems more likely that the correction will resume over the next few days. However, we may see the Dow stretch for the 50% retracement level of 10,350 before it tires out.
Today's action will likely be called a follow-through day by IBD. However, I would want to see a follow-through of the follow-through. Most indexes are now overbought and due for a pullback. Let's see how that plays out before jumping back on the train.
The value of maintaining some core long positions is being demonstrated again.
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