Is bull tired?

It would be naive to think the limit is the sky in terms of stock price. Considering the strong performance lately and extraordinary gains of certain momentum stocks (drys, bidu for example), it is no surprise some investors took their chip off the table today. After all, there is no bad profit.

Some negative news did not help either. The bad retail number probably sealed the fate of the day from the beginning. All other news, like bidu get downgraded, are just the excuses.

It is a small decline percentage wise, but the way how it happened does raise some red flags. The velocity and ferocity of the sudden shift was indeed caught people off guard, left many speechless. It took only a little more than an hour for DOW to go from record high to negative. and volums swoopped after that. Like a fire alarm suddenly went off and all were rushing for the exit.

If the market is in a steady uptrend, an occasional drop is expected, but more or less in a orderly fashion. Today\'s market is more like a panic sell. that is rather disturbing. The only consolence was DOW is still above 14000.

SMH seems destined to be lagards, it went down below its 50 MA. Does that spell trouble for nasdaq and QQQQ?

It should took more than one time of this kind of selling to spook people, but it does remind people of risk involved. yes, the market is still strong, there are might be some good surprises (like tech earning etc) down the load to make people re-enter the market, but you sure need pay attention ahead. and if the direction is not clear, your best defense is take no action. and wait for the opportunities to present themselves.

Of course, for people who are full of confidence and so sure of where the market is going, that is a different story. For those with innate ability to see the future, they are destined to be in the upper echlon of the sciocity, like Warren Buffet, who has never doubt that he was going to be rich. But for those whoes confidence is coming from ignorance, they may have better chance in casino, and the probablity of ruin of their future outweighs success by a greater margin.