Is the tide going out? Who's not swimming with a suit?

Overbought may be the only way to describe the market of the past nine days. Up on every session. It's no wonder we're getting short signals.  The Dow Jones Industrials ($DJI) are lagging the SP-500 ($SPX.X) which seems unusual. Yet the Dow Jones Transports ($DJT) are leading both the Indiustrials as well as the SP-500. So, Dow theory is leaning bullish. It is a Bull driven market, and waiting for these usually profitable counter trend pull backs can get old. But I would be remiss if I didn't update you on the current readings of last night's MktDiff indicator.

You can see the recent three signals we've had indicating a short here and how similar this period is to our more recent January 2010 series of days that did pretty much the same thing.

The decline in volatility over the last six months has brought trading back to June 2007 levels (chart of $VIX.X below) and put many traders to sleep. While the decided lack of volume makes one wonder if there's not a better place to put your money? Fear not, someone somewhere will do something to rattle the stability and make the spreads go wider. Make sure you're wearing a suit when the waves go out. I hear those tsunami's can really pull the water out from under you before they hit.

Keep your pants on,

Klatuu