Dull Market

We are still just chopping around since the Easter holiday.  We are near the end of the grace period (about 4 weeks) since we bottomed on April 11.  The bulls have had plenty of time to reestablish long positions after getting scared out in the tech wreck in April.  Now it gets harder.  I am leaning bearish, but not with a lot of conviction.  The strength in bonds, weakness in the Russell 2000, and lagging emerging markets favor the bears.  The bulls have a bull market and favorable price action on their side.

I side with the bears, but even if the market goes down, I expect it to be just a small little pullback, perhaps for 3 days and maybe 2% at most.  I see no major pullbacks unless you get a notable deterioration in China, which is possible, but just hard to time at the moment.