- Most rallies don't end until they suck in the majority of traders. We finally saw a move to the bull side by Rydex traders yesterday. While not at the extreme seen at the end of previous rallies, they have finally moved to the bull camp.
- There has been a decent amount of call buying the past two days further showing that investors have finally bought into the rally.
- The market is no longer oversold and will be maximum overbought by the end of the week or early next week.
- There are numerous divergences.
Ingredients For A Top
Two weeks ago I wrote a piece, Ingredients For A Bounce. I believe we are approaching the opposite extreme and the ingredients are beginning to line up for a top.