Where's the Fear?

The level I had been watching and writing about as support, 1598 on the S&P 500, was not only reached, but reached exactly last Thursday. Consequently, we have had, as anticipated, a substantial rally since then. But now the very tight trading range Monday is saying that markets are encountering heavy overhead supply. It appears that we have been building a trading range in the last three weeks, with the high at 1688 and the low at 1598. A move through either level would be significant; however, volume has tended to be heavier on the downside, suggesting the market is likely going lower, not higher.

Particularly bothersome is the fact that the selling brought in no substantial fear. The Volatility Index (VIX) moved somewhat away from its extremes, but not enough to suggest fearful selling. Moreover, the Arms Index daily numbers refuse to get large, indicating a prevailing complacency. We have just seen the largest pullback of the year, but it is being greeted with so little concern that it has not eliminated the weaker holders, as would be healthy for the market. The market is still very overbought, especially on the intermediate-term and longer-term indicators. I see this rally as a selling opportunity, not an invitation to go long....228 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.