I don't rule out that the market is rolling over but I believe it is more likely that we are in the midst of a shakeout. There are a number of reasons I believe that the rally might have more to go once this shakeout is over:
- The market is still oversold in the intermediate term, even though it is short term overbought.
- The rally has only been tentatively embraced.
- Quarter end and the turn of the month have positive seasonality effects and are only a short week away.
The more likely end points for this rally are after July 4 weekend, when the positive seasonality ends or July expiration, when the market is once again overbought in the intermediate term. Bears who want to short the market should allow for both these possibilities.