ANOTHER STRETCH

SPX/NDX both way above their SMA 50's and probably a bit ahead of themselves. The NDX about 12% above and the SPX about 9% north. Don't have the exact time the markets were that far north of the SMA 50 but it looks like around May of 2001 and the bulls really don't want to looks at what happened after that stretch.

For inquiring minds - the SPX went from about 1315 on the stretch to 770 in October of 2002- in pretty much a straight line.

RSI (2) levels on both indexes also stretched near 85.

One stat we haven't seen in a while is a stretched VIX - but the bulls also have that to contend with as it sits at about 36.5 and 11% below the SMA 10. Note the last times the VIX was low and stretched we had the following closes:

December 26, 2008 SPX 873 VIX 43.38---10% below SMA 10;

January 6, 2009 SPX 935 VIX 38.56 ---8% below SMA 10;

January 28, 2009 SPX 874 VIX 39.66--- 15% below SMA 10;

January 29, 2009 SPX 845 VIX 42.63---8% below SMA 10;

April, 9, 2009 SPX 857 VIX 36.53---11% below SMA 10;

So just a few recent results of the stretched VIX and its pretty clear that a stretch lower has been a pretty good sell signal. And now we have a stretch lower on the VIX and a stretch higher on the SPX/NDX- any further moves higher will have me selling longer term stuff and adding to some shorts. But will wait for action to dictate.

Barrons pretty blah this weekend with lots of skepticism about the rally.

Some good links for today:

Mauldin a good read on the recovery that he doesn't see;

Some leadership during this rally;

Real Estate in the Hamptons- not so good;

TWITTER as a day trading help;