The NASDAQ 100, or NDX, has been on a tear since the March lows. But this week we saw something that made us take note. Call it a buying climax or call it a weekly reversal, the pattern is pretty much the same: the market, in this case the NDX, hit a new rally high during the week then ended up closing below the previous week's close. This historically has been at least a short term bearish sign.
This doesn't mean that the market will crash with 100% certainty; nothing about the markets is 100% certain. Given the historically bearish time of year, the extent of the recent run, this prompted up to get our defensive team ready just in case. This may just be a breather, but we did lighten up on our NDX positions on the close today. We'll see how this plays out but we are being more cautious here.
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