There is just simply no question that this market is quite amazing as each time it begins a decline, it snaps back in force. I am going to say force and not strength, simply because the short term model remained negative and there are negative divergences abound right now.
This action we are seeing, while it is always nice to see the equity markets advance, is not healthy for the intermediate term. The most constructive thing this market can do at this point is to pull back on an intermediate term basis and gather much needed strength for the next major leg up. There simply is no strength in the last 4 rally days.
Of course the market is always right, but I must say that if the market continues to move higher in the fashion it has been, then I am going to entertain at least a 25% hedged position. Lets wait and see what develops.
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