High Volume Reversals Everywhere - Mike Swanson (11/10/10)

I am still out of town and without my normal laptop so can't post charts - but yesterday we saw reversals everywhere in the market - in gold, commodities such as agriculture, oil, and in stocks I'm looking to buy such as YONG. By reversals I mean stocks that opened up, went up sharply, and then came down to close on lows. You can see this clearly with DBA and GDX for example. There also was weakness in the S&P 500 and DOW - all of this came with a nice move higher in the dollar - the only thing that didn't move in the opposite way it has been the past few weeks are bonds.

It looks like this could be the start of the long awaited correction - however I do not think it is the start of a big decline, but more likely a fast pullback that simply takes a few days or a week or two at the most. The reason I say this is that investor sentiment has not gotten too wildly bullish despite the market rising the past week - in fact it is pretty much at the same place it was a month ago. This stands in sharp contrast to the peaks last January and April where sentiment was wildly bullish.

I have stocks I'm watching that I mentioned the other day - such as YONG - that I plan on buying on a correction. So I'm simply waiting for that to occur and glad to be patient so I didn't buy before a day like this. That is why you never need to chase stocks in panic but just wait for them to come to you - they always do.