Last week the S&P 500 rallied 3% even as investors fought the rally. Puts were bought all week, while Rydex traders have sold the rally every step of the way. I suspect that this will be the week when everybody finally embraces the rally. The market will not be maximum overbought until the end of the week and it is likely we will get there.
The market remains overvalued and the economy remains weak but a number of events have come together to give the market one more shot in the arm. While I will be looking for chinks in the armor I believe that fighting the market this week will be futile. Next week is a different story. By the end of the week we should see some giddy bullishness just as the rally nears its end.