Wednesday's comedown marked a change in behavior from a rising, low-volatility market chugging forward to a falling, higher-volatility one. This not an uncommon resolution to a market moving higher in zombie-like fashion.
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Technically, Wednesday marked an outside day, so-called because it has a higher high and lower low than the prior session. Such a day often marks a reversal in trend, if only for a short while.
It remains to be seen whether the concern expressed by some Fed officials over the risks of continuing the bond-buyback program will provide a further excuse to lock in profits. This new development, in combination with Wednesday's outside day and the threat of forced spending cuts on Mar. 1, up the chances of near-term turbulence in the averages and leading stocks.
One thing to note is the sharp mark-ups seen over the past few days in some of the more speculative Internet stocks, such as YY Inc. YY , Trulia TRLA , Angie's List ANGI and Zillow Z . The implication of this is that something may have changed in the market's speculative sentiment.
And while there needs to be a certain amount of speculative sentiment in order to push prices higher, too much of a good thing will kill a bull market.
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Trulia appears to be forming a witch's hat peak, an uncommon topping pattern.
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Angie's List gapped up on volume 1,087% above normal.
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Tuesday's report noted that " Because there has not been wholesale dumping of leading names, it still makes sense to enter selected titles as they reach attractive entrances ." In light of developments over the past couple of days, less-aggressive speculators will curtail their new buys, while more-aggressive players will find very little that approaches an attractive entry.
The builders are unattractive. Other housing-related shares act better, including La-Z-Boy (LZB), Trex (TREX), Winnebago (WGO), Lumber Liquidators (LL), Weyerhaeuser (WY), Sherwin-Williams (SHW), Louisiana Pacific (LPX) and Pier 1 Imports (PIR). Notwithstanding this, some of these showed some selling pressure on Wednesday.
If the builders were to come undone in a serious manner, this would remove a major leg beneath this bull market.
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