I’ve got to admit, today’s price action had me surprised – even with futures indicating a strong open, I still thought we would see the markets give those gains back before the end of the day, and while there were a few attempts throughout the session to drive prices lower, the bulls prevailed. However their showing was somewhat pathetic in terms of volume – which makes me believe that despite all the talk that the market has hit a bottom, the buyers are still spooked to to put a lot of their captial to work on the long side.

If you’re a long in this market, I would start getting weary about those paper profits that you have. Despite all of the huge bounces that we have seen throughout this year after large sell-offs, the rallies have been unable to hold its gains and instead over the course of a couple of days, gives back most if not all and then some of those gains. Over the past week the markets have rallied about 10% – and it is due for a nice pullback.

Here’s the Nasdaq and S&P charts…

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