BUILD CASH...AGAIN

We broke out today on the S&P 500. I told you last week that if we broke out, I would look to build cash and cut back on the trades. There is a chance we could rally into the end of the year, but we are approaching some nearer term resistance around the 1120-1125 area in the S&P 500. This area is a 50% retracement from the move down starting on 10/11/07 to 3/6/09. This area is also about the same distance away from the 50 day MA where other corrections have started over the last few months. There are several divergences, starting with the RSI and MACD. Today's volume was decent, but the earlier moves were on lighter than normal volume. I exited most of my positions on AAPL and AMZN. I will probably close out the entire trade on the next move up (or down). I'm holding on to APA for another day or so. I'm interested to see if the dollar (UUP) breaks support and heads lower. If APA rises on a break of the dollar support, then I will probably stay in the trade. If APA doesn't rise on the break of the dollar support (or if the dollar rises), I will probably exit the trade. I liked IPI last Thursday (when it broke above its 10 day MA), but these last two days have caused me to worry a bit. It's possible that IPI is completing a "B" wave of a bullish ABC pattern. If this is the case, then it will probably break below its 50 day and 200 day moving averages before it completes the "C" wave of that pattern. I will keep the stop just below the 50 day MA. It wouldn't shock me if this makes one more move down. The more it continues to move sideways, the more likely it will break lower. I will keep my eye out for some new trades to post, but I still recommend that you start to build cash and take some profits off the table. Any new recommendations will include a caution to use smaller amounts of capital.