Friday, February 18, 2011

Is a Pullback Imminent?

The stock market has been remarkable since the early part of this year. It has risen, with a few pauses, but the direction has certainly been positive. I think we are in a bull market, and still in the first leg of that bull market. The difficulty I am having is that such an uninterrupted expansion with fewer sellers and less demand means that if, for some reason, more sellers begin to show up, demand will likely not support current prices. Since January 29th, when the NYSE 10-Day Moving Average of volume was 4.9 billion, it has dropped about 20% to yesterday, February 17th, when it reached 4.1 billion. Volume should be expanding to support a stock market rally. As I have said previously, I believe we will see a correction with a buying opportunity. Ed Mallon