It’s hard to sit through pullbacks, but as Jesse Livermore said, the real money is made by sitting, not by coming and going.  The last two days have been a tough chop fest where you really don’t want to be trading.  I took off a decent amount of long exposure yesterday morning at the top, but not enough to keep me from looking at my book today and cringing, just a little.  Even when you know what’s about to take place, and that your plan is to let it happen and buy into it, watching your P&L move against you is never fun.  Today my second largest position, and what is a normal position size in $WPRT is down 10%, not fun.  Other than that, everything is acting predictably soft, consolidating nice gains from the past week or so.  We’re not playing for peanuts this time as has been the case the past three months.  It’s time to make some real money as the market has become a bit healthier.  Raise your stops along the way and buy the pullbacks.

Volume today is extremely light, 30% under the average from the past 30 days and the lowest volume of that time frame.  The market action is healthy, we are consolidating in an orderly fashion.  That doesn’t mean that we can’t roll right over, it will be very important that along the way the bulls make it tough for those trying to short this overbought market.  If the bears gain momentum and we see some high volume bouts of selling, I will change my tune pretty quickly.  For now though, I continue to believe we will find support at or above $SPX 1100 and make another trip higher into next week.

I added a pretty decent sized position in the agricultural ETF $DBA this morning.  Wheat, Coffee, and Sugar are on fire and this ETF has it all.  It’s a slow mover, but I love to trade commodities as they often trend very well.

I’m stalking a bunch of names, some that I mentioned yesterday and a few others.  I like the action in $GMCR this afternoon, keep a close eye.

Keep a close eye on $GS and $INTC, the action in both should give good clues over the next few days as their sector ETFs $XLF and $SMH are at big resistance levels.  If they break through this market can rip.

As I said, if you’re a swing trader and you took good entries last week, sit tight and trade your plan.  We should know more come the end of the week.