Must-See Charts: Be Ready to Sell S&P 500
NEW YORK ( TheStreet) -- The March S&P 500 futures have continued to grind higher, with investors pushing the index up to 1,471.50 last week. The market, however, has not been able to break away from this area of multi-year highs -- at least not yet.
It appears to me that the recent swing high was simply a stop-running expedition. Unless the market can break out in strong fashion with a close above 1,480, I remain skeptical that we'll see another leg higher.
After all, many of the indicators I use are now in neutral territory and are flirting with becoming overbought. Money has been pouring into mutual funds again, and we all know the market's tendency to reverse once everyone starts getting long. Earnings season is upon us, and any major disappointment could be the market's undoing.
Let me be clear: I do not expect a major sell-off. (However, this will be dependent on lawmakers getting a debt ceiling agreement done.) I do feel that the market is getting overdue for a pullback, and the fact that there is a large gap still open underneath the S&P 500 only reinforces this belief.Gaps tend to get filled at some point in time, and often sooner rather than later. If the market runs out of gas here, I think the gap fill in the coming weeks will become likely and could help set up a decent short position. It is important, however, to be patient and not jump the gun.
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