MELT UP?

We are still waiting for that big down day on higher than normal volume. Until that happens, the market could continue to "melt up". We are seeing signs of a top, but these tops can sometimes take a while to complete. The VIX made a big drop down on a flat day in the market. Normally that would be considered bullish...but with the market already overbought, it could be considered another sign of a top. I just read an article talking about the short interest declining during the month of September. This is a sign that the short sellers (bearish traders) are getting beat up and that they are abandoning their short positions. This sounds bullish, but it is also a sign of being near a top. Normally I would be screaming to buy puts at this time...but with the Fed doing everything possible to prop up the market, it is unknown how long we can continue to "melt up". Many of you have been sitting on the sidelines waiting to get back in. Your patience will likely soon pay off if the markets start to move down. At the time of this posting the Nikkei (Japan) is down 2% and the S&P futures are down 8 points. This doesn't always mean the U.S. market will drop tomorrow, but it could make things interesting. Alcoa (AA) gapped up and sold off today, but the volume just wasn't there. The volume was light almost everywhere. This could be due to the Columbus Day holiday...although I didn't get a holiday. We'll see if things pick up tomorrow. The market might be waiting on INTC earnings after the bell tomorrow. Not so much the current numbers, but the outlook for next quarter. The forward guidance will be key on a lot of stocks.