MARKET RALLY SHOWING WEAKNESS

Last week the S&P 500 dropped below its 10 day MA before closing at it. The Nasdaq has already closed below its 10 day MA. The Russell 2000 is well below its 10 day MA. The Dow is the only index that has seemed to perform well. In other words, there are only a couple of large companies that are making this market look like it is okay and going higher. You can believe it if you want, but I'm suspicious. The volume has been light so far today despite the appearance of a big rally. This could change in the next 2 hours so I'll keep an eye on it. The Dow Transportation Average (IYT) is often a leading indicator of the overall market. It is well below its 10 day MA and has not rallied much today. You have MACD divergence and RSI divergence. Just about every technical thing I look at says the market is rolling over and should start going down soon. I'm still nervous because I know how much the Fed wants this market to go up and I've seen what it can do to "prop" it up, but I also know that they can't keep it up forever. The market might be able to rally a bit more this week as good earnings keep coming out, but "earnings season" will really wind down next week. I don't see anything else out there (news wise) that will keep the market going higher. If you have the guts to do it, you should consider buying puts on SPY, QQQQ, and DIA on today's rally. Not huge positions, but initial positions. That way you could add to them when these indexes close back below their 10 day MA's. If you do take on an initial put option trade, don't add to it if the market keeps inching higher. We don't want to wipe out our accounts if the market does keep going higher. We want to get more aggressive and add to our positions when the market gives us confirmation. Other bearish trading opportunities include (MA) Master Card (if it can get back below its 50 day moving average), XLB, XME, CMG, and SOHU.