an tSionna: Over Bought & Extended.

The market had a monster move in July. I'll have more to say about that in the next week or so. For now though we need to access what's happening. This kind of move just begs for the "smart money" to short it. That of course is a problem for them because they've been hurt recently and we've seen a lot of short covering over the past couple of weeks.
Today the market is bumping up against resistance that goes back to last fall within the trading range we've endlessly discussed these past 7 or so months. Such a move in a very short period of time has left stocks very extended. Stocks are also very over bought so logically one would expect stocks to correct. I'm still mindful of those seasonal patterns which by the way suggest that the weakest months for stocks are still in front of us. (late August-Mid-October.)
It may not be so easy this time for that to happen. There's trillions of dollars in money market accounts earning less than 1% that's missed out on one of the great stock market rallies in history. This money will likely want in at some point which could make pullbacks shallow and buying opportunities instead of places to lighten up equity exposure.

For now though we're very over bought and extended. Probability would indicate some sort of pullback given the extent of the move. We'll have to see!
*Long ETFs related to the S&P 500 for client and individual accounts.