The Last Dance

There are a number of reasons why I believe strength early in the week could lead to weakness later in the week.

• Investors have warmed up to the market in the past couple of weeks but are still hesitant. A further rally, especially one that takes the market over resistance, could get sentiment into the extreme territory that typically leads to a pullback.
• Seasonality is strong today and tomorrow but turns weaker on Wednesday.
• The market is overbought so I would be surprised if the market could rally uninterrupted for the entire week.

The market's first test will be the ISM report today at 10. I expect a dissapointment so it will be imperative for the market to shake off that disappointment after the number.