MILD ARMS

Dick Arms over at realmoney.com gives his opinion this morning on the state of the markets:

"It isn't surprising that the markets have hesitated the last few days. At the end of last week, I noted that the Dow was right up to the highs of early July. In addition, we saw that various indicators, such as the VIX and the shorter-term Arms Index moving averages, were getting well away from the oversold extremes of three weeks earlier. The market looked as though it was due for a rest.

So far, stocks aren't overbought enough to be disturbing. The up days have been punctuated by enough down days to keep us from an extreme overbought level.

I continue to suggest holding most long positions established early last month, but I'm willing to take profits on stocks that look as though they have run too far, too fast. We may see some more upside in the next few days, but I think the bulk of the advance is behind us."

Bottom line, and I agree, we are near the top end of the recent range and the markets probably are not going to move substantially higher. In addition, we are heading to a seasonally weak period, so probably not much upward movement till the fall.