Break in Momentum

This week witnessed a major break in the favored momentum names. Maybe it was attributed to the federal government shutdown and subsequent political standoffs. Maybe it was the uncertainty of who will sit as the next Federal Reserve chair. Maybe it was the weakening jobs and economic data. Or, maybe it was just about time.

We'll probably find out in a few months but right this moment it does not really matter. What matters is that the selloff in the high flyers is real and quick.

On a more balanced view, the pullback is good int eh grander scheme of the trend. It tames greed. It refreshes bullish risk takers no-loss views. And, more importantly, it gives bears some fodder to keep them interested and in the game. Give-and-take is required and necessary for uptrends to continue.

It was prudent to raise capital the last several weeks and months since the summer swoon. After this week, selling is probably not the wisest move. More and more of the uncertainties mentioned above will be vetted out.

Traders and investors will be more interested in the market in November and December. Until then, keep your powder dry. Be studious with homework and get yourself ready to nibble and bite back.