A Time For Defense

With leading stocks like Dell starting to get hit and the S&P 500 and QQQ beginning to show signs of distribution, this is a time to play great defense.

Although the market is only a few percentage points off its new highs, it has been dominated by net new lows. The advance-decline line also shows that market breadth remains weak.

We're starting to see many former leaders break down. All of this leads us to one conclusion: we have to play defense here.

Sure, conditions could improve, but we must follow the probabilities, which suggest that the market may correct sharply from here. Remember, we can always get back in but risk must always be managed in real time.

Risk right. Sit tight.

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