Today's price action was very bearish and typical of a topping pattern, but I've been fooled by some of these similar bearish patterns over the last few weeks. Although the markets are extremely overbought, it is hard to tell how long the Fed will (or can) keep things moving upward. I'm waiting for a closing price below the 10 day MA on all three indexes. It also wouldn't hurt to get an S&P move back below 1130. Even if both of those things happen, I will still be suspicious if the selling isn't accompanied by higher than normal volume and a spike in the VIX. This is a dangerous area for new bullish trades and not quite ready for new bearish trades. The only trades I am using right now are vertical call and put spreads (Course 2)...mostly on those overbought stocks I listed in the previous postings. Not a bad time to sit on the sidelines and maybe catch a movie...like maybe Wall Street 2. By the way...I dragged my wife to see that movie and I know she didn't have a clue what was going on. That's okay, I've sat through my share of "chick flicks".
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