I view most of the news that the mainstream financial media focuses on as noise. However, in the past week we had a genuine important news event when Mario Draghi changed his attitude towards how the ECB plans to battle the sovereign crisis. I have spoken much more about news than I generally do and want to focus this this post on the statistics.
In the intermediate term the market is now overbought. In the short term we could see a pullback in the next few days but a better overbought reading would occur if we rallied one more time after that. Most sentiment indicators are mixed but some are showing too much optimism. Rydex traders are positioned very bullishly and the investment advisors polled by the NAAIM are about as bullish as they have been all year. From the NAAIM:
Looking solely at statistics I am more partial to the bearish camp. However, if the ECB acts forcefully none of this will likely matter and we will likely go higher until we are at a bullish extreme. As I have little insight to what the ECB will do I am neutral.