I remain wary of the overall market and am at a small net long position. Yesterday, Rydex traders moved to their largest net long position ever save for May of last year. This was right before a 20% correction. The AAII bulls now outnumber the bears by 51.6% to 20.2%. Mark Hulbert notes in his column that insiders are selling at a pace not seen since July. This is in addition to the warning signs I pointed to yesterday.
There are some indicators that are still not lining up for a correction, even though the majority of the evidence is pointing that way. Investors Intelligence has 52% bulls and 28% bears. Normally, that would be slightly bearish but in the context of a 25% rally there should be fewer than 28% bears. The ISE equity put/call ratio is showing excessive put buying while the CBOE is showing extreme call buying. I have never seen these two option indicators diverge by so much.
There is great jubilation due to the announcement of a Greek deal. There is an old saying that goes "buy on the canons, sell on the trumpets". The market could have been bought for 25% less a few months ago when the world was ending. Now that we are going to live happily ever after you will have to pay up.