WHERE WE STAND

In light of the recent bubblevision blather about the new six year highs on the DJIA and the SPX one tends to lose sight of the fact that the RUSSELL 2K (IWM) is within pennies of its all time high hit back in April. The talking heads will also have one believe that the Large Caps are "starting" to outperform. I have one word for them - NO. And if you/them really think that a market that trends higher will be led by GE MSFT PFE XOM WMT C PG BAC JNJ and INTC, and not Small Caps, I suggest you/them put a bit more thought into the process. If you think that the market will trend lower, than yes the Large Caps will probably do less worse.

The markets have recently trended a bit higher but according to my indicators are not in overbought territory yet. The VIX and the VXO are both sitting near their respective 10 day SMA's and the 2 day RSI on SPY is 66, QQQQ / 78 and IWM / 86. If you really want to get technical, pull up a one month chart of any of those indexes and you will see that they are all right in the middle of their recent ranges.