Today is one of those days you have to make a tough decision. Are you going to chase strength or play the statistics? I have a feeling the market will show a ST top today, but I do expect a green candle. It is possible, this top may only lead into a consolidation, not a pure correction, but it should be a top in ST upwards motion nonetheless. In an ideal setting, we hit yesterday's high target at the upward channel right on, and now we should contract. TRIN is .48, which suggests opening weakness, $CPCE is .51 suggesting WAY TOO MANY BULLS as well as minimal protection to downside. That's the lowest I have seen in 6 months. VIX shows support at the bottom of the 10 day bollinger band, but offers just a little more room to fall on the RSI's and the 20 day BB suggests more room as well. 

The thing to watch is the RSI 10 and 14 on SPY. RSI(10) is already over 70 and RSI(14) is a day or two away. That would give us an intermediate term top should we hit there. The market will not be doing any favors except to the bears to rally much higher ST. VIX:VXV remains at 92.6 in the warning level.

So bottom line is this. If you play this rally, you have no reliable exit strategy, unless you see something that I do not. You can hope for 148.50, which is the upward trend line, but hope is a crappy strategy. I would say wait it out, even though the market will likely rally. This is being disciplined. Trust me, there will be plenty more opportunities to make money that will be more predictable and safer. Do not short this rally right now. There is too much volume and momentum, and again I do believe short term is up.

Last thing I want to offer is I do see yesterday's pump and dump scenario as being more likely day by day as this rally progresses. When you expand to new high's on less bad news that has not actually happened, and skid upwards on the BB top escentially going parabolic, this is not healthy on the intermediate term. Again, if this is a three, we could still be waiting a little while before we crash out, but do not try to time it too much. Once the market starts to misbehave, have the courage to sit it out unless you see entries AND exit points.

Safe and profitable trading!



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