NEW YORK (TheStreet) -- Today was one fun day of trading in the stock market as the month of May came to a close. Since April 11 the S&P 500 has been on a tear to the upside, gaining 6%. Hats off to the bulls.
The DJIA on Friday finished up 18.43 points to close at 16717.17 while the S&P 500 closed up 3.54 to finish at 1923.57 after being in the red all day until the last 30 minutes of trading. The hedge funds programmed machines sure do know how to put on a show when they are in total control.
The Nasdaq closed down 5.33 at 4242.62 and the Russell 2000 finished down 5.57 at 1134.50. As we closed the books on May, the Russell 2000 index is the only index that is in "Trend Bearish" territory.
So, where do we go from here? The S&P 500 and the Nasdaq are both well into overbought territory. On a green open Monday both indexes will again be approaching extreme overbought conditions. This market is a trader's market and is not for the buy and hold crowd.
If you believe that it is a buy and hold market because the indexes have been climbing steadily higher, you have no risk management process. In sum, this market is coming down from these levels. Make sure you, as a trader, are positioned on the correct side or it can be painful. Chasing mo mo is a no-no for me.
To be more specific, the PowerShares QQQTrust (QQQ) will be in extreme overbought territory on a green Monday. The Market Vectors Semiconductor ETF (SMH) closed Friday with an extreme overbought signal and will be approaching extraordinarily overbought with a green open on Monday. How do I know this? Visit www.strategicstocktrades.com to find out.