By Jeff Pierce

Today`s rally is cause for concern when you consider the declining volume on the averages below. The Nasdaq has basically been consolidating for the last 3 weeks trading inside a box and until it can break out of this trading range one should not be overloading on the long side. It`s OK to buy selective longs at this point as my timing signal remains bullish on all three markets I cover, but for now I am suspicious that there isn`t more downside in store.

Part of me thinks that the market has been self correcting by rotating sector strength and that we`re about to go higher, and this belief comes from how strong my timing signals are. However the other half of me feels like the markets are exhibiting some very speculative trading with what we`ve been seeing in the biotech sector as of late. It`s a constant challenge to determine whether we`re at the start of a massive run in biotechs or at the end.

XLF and XLY also posted decline volume.


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