NYHL New Highs-New Low and NYA NYSE Composite Daily Charts

The green circles show the tops occurring in the stock market as an excessive number of highs print. That behavior is over-the-top joyous bullishness; the party is in full swing with everyone on one side of the boat, so it makes sense that stocks do what few expect and retreat to take a rest rather than rally.

The two red circles show the only tradeable bottoms over the last 7 months. Note the blue line shows that the New Highs minus the New Lows have not fallen under the blue line in over three months since the election. King Trump's promises of more spending, lower taxes and less regulations are a home run for the bulls. A pull  back is in the cards. Interestingly, however, President Trump keeps pumping stocks higher with news bites causing short sellers to cover, creating rocket fuel, which floats the stock indexes higher and higher.

It is prudent to scale yourself out of the longs in this daily time frame; a pull back is likely. It is not attractive to buy stocks on the long side until the NYHL comes down to kiss the blue line, then you can bring on long trades. In choppy sideways sloppy markets you want to do more watching than trading. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.