From Strong to Weak Hands

The past week we have consolidated above 1800, trading flat but gathering up more bulls in the process.  Also, getting more skewed call volume over the past several trading sessions, a sign that greed is taking over.  I am seeing short term topping signs, as the smart money sells to the dumb money.  The 10 year yields are sticky above 2.7%, and do not want to go down.  It looks like we will see a concurrent selloff in the 10 year with the S&P, as the biggest fear in the market is not overvaluation, but the Fed tapering with stronger employment numbers.

I don't see a December taper, because most of the Street do not expect it, and the Fed under Bernanke has NEVER surprised to the hawkish side when it comes to policy action.  On rare occasion, they have talked tougher than expected, but they have never acted tougher than expected.  

We are near saturation, there is very little upside for the next several weeks.  But also limited downside due to the lack of pullbacks.  Right now, I can only recommend looking for spots to short sell.  Going long is only advised after 1.5-2% dips. We will not dip more than 3% for quite a while, so 2% dips are safe to buy.