WEEKLY MARKET UPDATE

The long term trend remains up as does the intermediate term trend.  As you can see from the weekly SPY chart, this week closed lower than last week at 169.31...still above the high made in May at 167.78.  However, as bullish as things seem this is definitely not the time...IMHO, to establish new positions if you haven't already been fully invested in the market.  I say this for two reasons:

1)  On a statistical basis the market is extremely overbought compared to the 50 and 200 day moving averages which are widely followed by institutional investors.

2)  The sentiment indicator that I place very heavy weighting on is at a historical extreme and is starting to become bearish.

CONCLUSION

If within the next couple of weeks there is a weekly close below 167.78 before any substantial new highs are made, I believe an intermediate term correction is highly probable which has the potential of driving prices down to the 155 - 157.50 levels, which represent the previous all time market highs in 2000 and 2007.  While both trends remain up, now is the time in my opinion to start hedging to protect any gains you may have made in this bull market.