MORE ARMS

Our friend Dick Arms has some morning comments on realmoney and he seems to be hedging his opinions:

"But now we have seen a decisive move through the top of the consolidation by all the major averages. That suggests more of an advance is in the offing.

On the other hand, the short-term moving averages of the Arms Index have now become overbought enough to get our attention. The sudden buying spree in the market has pushed the Arms Index moving averages to levels that often are seen at or shortly before a short-term top. That suggests that the current advance may have progressed so rapidly as to get a little ahead of itself.

I still am willing to hold long positions and not fight the tape, but any sign of weakness would prompt me to take profits in short-term trades with the intention of coming back in on a pullback to the breakout level."

First, Dick is wrong, we have not seen a move higher by the NAZDAQ COMP or the NAZDAQ 100 and they are still major averages. Second, his ARMS Index is now at an area often seen at or shortly before a major top and that conincides with my major indicators.

Otherwise, I agree with him, any sign of weakness sell and then buy lower.