PULL BACK COMING SOON?

The rally today took the Dow above its June 21st high. It did not go above that high on the S&P 500 or the Nasdaq. The volume, however, was on the lighter side. This tells me that the latest run up could be losing some steam. We are probably due for a pull back in the market. I'm still not quite sure how to interpret today's move. Either the generals (Dow average) are leading the way and the troops (S&P 500) will follow, or the troops are about to move in the opposite direction. If we do pull back tomorrow, I will watch carefully how we pull back. If we sell off on higher volume and a spike in the VIX, I'll expect the market to start a big move down. If the pull back is choppy and the volume is average (and no big spike on the VIX), I might start recommending some bullish trades with the expectation that we will move higher. If we end up moving higher tomorrow, I'll watch the 1131 area on the S&P 500 and I'll still expect a pull back soon. For most of you, I'd still recommend sitting on the sidelines. Wait until you get stronger confirmation from the market as to which direction it is heading. I took on an aggressive put option play on the SPY. I bought puts expecting at least a short term pull back. I will stop out if the SPY moves above that June 21st high.