The broader markets were mixed on Friday with the S&P 500 and Nasdaq posting gains. The Dow Jones index was down, but the majority was due to Honeywell. The internals were pretty flat favoring the buy side slightly. There was also something that concerned me a little: the lack of follow-through after a great performance Thursday. I'm not saying the market is looking tired or anything like that, but it would have been nice to see some follow-through.

With the market looking better than it has in years and the mood upbeat, I've found a short. Alexion Pharmaceuticals (ALXN) had a huge downward spike in late November accompanied by better than average volume. Notice over the last few days the stock has tried to rally off its lows, but the volume was not that strong. If there was strong volume associated with the up-move, it would suggest that buyers were jumping back in. I'm waiting to see the sellers take the upper hand on Monday. If Monday's low takes out the lows from Friday, more probing to the downside is likely.

Alexion Pharmaceuticals

The market posted its first losing week in seven weeks. It is normal for a pullback to occur and at this point that is all it appears to be. Until we see some failed rallies by market leading industries, market strength looks to be intact. Use your stops to protect your profits and principle.

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