We are finally headed towards a maximum overbought condition. At the same time investors are finally starting to warm up to the market as the AAII survey bulls jumped to 51%. It would not be surprising to see the market start heading lower Monday or Tuesday of next week.
Investors still seem tepid towards the market and ideally I would like to see more excitement before turning negative. Its possible we get it in the next couple of days. But given the weak seasonality and weakening economy I am not certain we will reach bullish extremes before turning.
On the one hand there is tremendous economic risk and on the other is the possibility that hedge funds decide to re-risk. Tread carefully but if you are inclined towards the bear side we seem headed towards a decent risk/reward setup.