The markets put in an anticipated pullback today. It tipped its hand Friday by not following through with Thursday's big up-day. The internals were consistent with a slightly down day. At this point, it seems to be a correction/breather after a strong rally. I am still looking to buy dips rather than trying to scalp a small correction.

Being a top down investor, my nightly research consists of looking at all the sub-industry groups to identify any theme in the market. For example, what industry is trending, bottoming or in transition? I've noticed that the machinery industry has been one of the stronger industry groups over the last month. Also, almost all of the sub-industry groups that make up the industry have been performing well.

Drilling down further, Parker Hannifin Corp. (PH) has been trending on good volume. For the last two days, the stock has pulled back slightly after an exceptional day Thursday. I will be looking for another leg up if Monday's highs are taken out.

Parker Hannifin Corp.

Remember to place your stops on all trades in order to protect your profits and principle. Even though things look favorable for the markets to go higher, it could turn and go back down into its previous trading range.

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