Possible Profit Taking Today As Dollar Rises

There will probably be some profit taking in stocks as the dollar rises and commodities fall, writes Alfred Goldman, Chief Market Strategiest at Wells Fargo.

"Moderate volume continues to be the "fly in the ointment" that is taking away from the quality of the rally this week. Activity has considerably slowed from the pace during last week’s market decline. We still believe the bull market is solidly in place and supported by a recovering economy, ample cash, and reasonable valuations. Our short-term concerns center around our belief that the market has gotten ahead of the recovery and more and more economic reports have fallen short of expectations. We don’t see serious downside, but do believe it is prudent for investors to use caution and withhold new buying. As always, we will be flexible and adjust accordingly, but we do not think that time is here yet."

The insurance and health care stocks are under pressure too as the Speaker Pelosi said Congress is considering windfall profit tax on many companies in these industries.

Written by Armen Hareyan
Materials from Wells Fargo's Stock Market Morning Commentary are used in this report.