Small Caps Weak, SP 500 4-Yr. Highs, Negative Breadth, And Too Many Bulls

The SP hit new highs for the year. Yeah! right? Sort-of. Small Caps sold off today on a pickup in volume-Its 3rd distribution day past two weeks-but Semis and Bios led. Was that great for the market? No. When Big Caps start outperforming the smaller leaders, the markets are usually trying to put in a top. If it is short term or long term top, I do not know. I have a feeling it is probably short, though. The SP 600 is up 15.3% since the rally started April/May so a rest and/or pullback is definitely warranted at this point in time.

The rotation into Big Caps is evident in my scans, as they are the best looking charts at the moment. Most of the Small Cap stocks showing up in my scans are extended or just too wild in price action to be considered longs. As that happens there are few new buys and it is a great place to take some more profits. Not only that, since the market is looking toppy, with the recent frothy action, I have sold ALL laggards. Better to be early and book a small loss than be sorry and not have a stake to trade later on. The small oil plays on the other hand as Jim Cramer says "cmmonnn baackk." I am not ready to take profits in these guys yet. You know the ABLE GEOI DSTI etc. I have taken some off the table past two weeks. But the majority of my position is still long and strong.

One final parting blow. The AAII survey has only 14% bears! Short term top anyone? BTW, everyone can go back to May 4 and see that was the day I got long this market. I am still a bull but I am starting to see more signs that a short top is coming into play. With all my talk of how I am bullish longer term, I am building quite a larger short position than I thought I would have by tomorrow morning.

Account looks like this at the moment: 40% long, 25% short, 35% cash. Last week: 80-100% long, 0-5% short, and 0-20% cash. I wonder if this is telling me something more than I think it is???? I mean, the more I think about it, 14% bears!!! Everyone must know about this rally now, it seams like.

New Swing Longs: CRED ELTK ONXS ONNN

New Swing Longs On A Pullback: CRM

Longs That Did Great Today: STEM SPNC

New Swing Shorts: NXTP NVDA SNDA MAR HNP EMAG PRX GDP

Reversal of the Week: CCC (only lost 8%, but look at the reversal today)
Aloha!