Stocks End Day With Modest Pullback

The U.S. Stock Market pulled back a bit on Tuesday. The economic news of the day involved some weak earnings reports and a Republican backlash against the automaker bailout bill presented to the White House by Democratic lawmakers. Politics as usual in Washington!

After two big up days in the stock market, it was no real surprise that the market pulled back a bit today. I pointed in yesterday's post that the market was likely due for a pullback today and that the best side to play the market today would likely be the short side. Tuesdays have a tendency to reverse the market after some decent gains in previous trading sessions. The market opened lower, tried to rally, but rolled over after 11 am. Volume was on the light side today, and the trading ranges were narrow. This is the kind of action we like to see on pullbacks if the market is to head higher longer term.

The chart below is the Proshares Ultra Short Russell 2000 (TWM), an ETF. This is a great vehicle for daytrading. TWM followed the direction of the overall market today, but gave daytraders twice the bang for the buck.

Scott Cole