Watch Your Step Here

As recently noted, the seasonal pattern remains positive. However, the strongest part of it -- and, for that matter, the strongest part of the move -- has passed. That's not to say the market can't continue to move higher. To the contrary, it can and probably will. Still, the S&P 500 moved more than 9% in a little over a week, off the 0.618 Fibonacci retracement level at 1158. After move of that magnitude, it pays to be a bit circumspect in here.

As such, I have been advising selling into the rally, and that's what I have been doing for my accounts. I'm still maintaining a bullish bias, but I'm now invested only up to a maximum of 40% after cutting back a bit in my S&P positions at Monday morning's pricing at Rydex, with the index at the 1265 level. The idea is, first, to look for resistance levels to sell into. Then, if a good pullback follows, presumably to support, I'll use the pullback to add to positions....614 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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