I will try to have the weekend post either tonight or tomorrow morning. Just so you know, there are now weekly reversal signals on several of the indices, and even the VIX. Both Sentiment and the internals of the market are screaming overbought, plus diverging. I find it ridiculous that there are people out there who actually believe the market is poised to rocket higher to new highs. Folks, the printing effect of operation twist has generated a powerful rally, and probably the most powerful bear market rally seen to date. This is merely a snap back rally (from the July sell-off ) that allow for prices to regress to their mean. Bear market rallies are to convince the public that it's okay to buy stocks again. They suck you in and spit you back out. The stock market is in a downtrend! We still have a series of lower highs and lower lows dating back to the Head and Shoulders Topping pattern. Neither you nor I have seen a sell-off in the market, but when it comes, I think many people will be very surprised. It is at this point that people will begin to re-evaluate their analysis. Dont be fooled by what others tell you- the charts don't lie.
Bernanke said the other day that QE was considered, but "economic conditions at this time do not warrant" such a policy. Now think about it. The fact that Bernanke has even considered such a possibility of a QE style emergency back-up plan is quite telling. Hearing that, would you consider this market to be a healthy bull market? Do you experience growing economic problems that overshadow strong uptrending markets? The reality is, no one will tell you the market will go into free fall mode, nor will anyone speak of the downside risk.