Fundstrat technical strategist Robert Sluymer offered insight on the best way to play the stock market, which is especially timely as the Dow Jones Industrial Average surpassed 23,000 points for the first time ever Tuesday.

Sluymer said long-term cycle trends, momentum and performance relative to bonds remains positive for equities. In the medium-term, there's no evidence of a peak yet as indicators tracking the percentage of stocks with positive weekly momentum "continue to build to the upside."

In the short-term, though, indicators tracking two- to four-week shifts are overbought for larger-cap indexes and are beginning to show the early signs of a near-term peak for smaller-cap markets.

"As noted last week, the pullback in small-caps, along with Financials is an important litmus test for the rotation to value and reflation stocks," Sluymer wrote. "We expect pending pullbacks to hold, which is beginning to develop in larger-cap Diversified Banks."

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