The broader averages are starting to show signs of being tired. Over the last week or so, I have been telling you that the market is stretched to the upside and the internals are weakening. Note that the NYSE Adv/Dec is 999/2281 and the NASDAQ Adv/Dec is 853/2142.  Both are over 2-to-1 on the downside.

Before I go any further, I'm not predicting a crash at this time. I've mentioned before that I don't predict market direction.  I just react to what it tells me.  Over the last few days, the internals have been consistently getting worse and the broader markets are starting to get in line.

I have no stocks I'm interested in for Wednesday.  The reason is that the odds are not in our favor at this point. What I am looking for is a pause or small pullback before committing money to the market. The reasons are:

1. Long-term markets are moving sideways (choppy).
2. Intermediate-term markets are also sideways.
3. Short-term markets are up, but stretched.

If the pullback that I am expecting is minor, it will be a reflection of an overbought market and internals should begin to improve.  At that point, I will be ready to test the waters. Remember as a swing trader I am looking for the best opportunities with the best odds. Like in poker, be patient and wait for a strong hand. Money and trade management are the key differences between successful and unsuccessful traders.

Tom Incorvia is a swing trader with 18 years of experience in the financial markets.  E-mail him at tincorvia@gmail.com.