I would just like to make a brief and general comment about the broad stock market right now. Without going into a lot of detail, I want to point out that this market is extremely overbought and is pushing the limits of "normal" balanced market behavior. Many longer-term technical parameters and limits are being exceeded and cycle patterns are being distorted which makes the market highly unstable and susceptible to a strong correction or even a "crash". That said, shorter-term technical signals still look bullish as "irrational exuberance" seems to have infected Wall Street and is keeping equity markets buoyant.
The bottom line here is that we are watching this rally with very cautious eyes. As my recent blogs have indicated, we could see a brief, moderate correction soon. As long as that correction is not too severe we are looking to buy the bottom for another possible up-leg in this "exuberant" rally. The top of that second rally (if it happens) will be closely watched as it could be followed by a very severe correction. As usual we will look to our reversal zones to pinpoint significant turning points in the markets. Our strategy now is to be cautiously bullish.