The broader averages are stuck in a trading range for the last two weeks. This action is somewhat typical after a strong rally. My concern at this time is that on Tuesday when it seemed as though the stars were aligned for another push higher it stalled and gave back all of the gains for the day. Adding to my concern was the sell off on Wednesday, led by housing stocks. They have been one of the market leaders with the rally.

Even with the aforementioned concern, Varian Medical System (VAR) was only down slightly today. It has been trending since October with buyers showing up on every slight pullback. If Wednesday's highs are taken out, I expect another leg up to develop.

Varian Medical System

With the year coming to an end and most of the year-end window dressing done, the market could be starting its topping pattern. So be cautious with your positions and especially any new positions you add.  Use your stops to protect your profits and principal. 

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