Extremely Overbought

The market continues its aggressive move upward without taking a moment to catch its breath. We have had postive months posted since March, which is not normal. The DJIA has rallied as of this a.m. 43% since March '09, while the Nasdaq has gone up over 57% in the same time frame, a pretty impressive move indeed.

We view this situation of 5 positive months in a row as a once in a 75 year occurance and see the market as very overbought. This overbought environment can continue longer (as it did with the Nasdaq in 1999-2000), nothing is impossible. However the higher it goes in this manner, the more painful the return to normalicy will be. In other words, the higher it goes without a correction, the harder the fall will be. That's historically the pattern, not to mention using some common sense.

Additionally, the economic reports coming out and the corporate earnings being reported, have been better than the previous reports on the whole. Things have gotten less bad. But look at what the comparisons numbers were - they were weak to begin with.

Once last thing to consider. There has been an overwhelming Bid to the market, particularly in the last two weeks. All buy programs present. The selling programs, for whatever reason, have not been present. We see them as taking a rest, not extinct.