2. Apple has capitulated. The three year rally in AAPL shares from $100/share that has made the company the largest in the world appears to have ended with a blow off top:
3. The VIX broke out. Despite the recent rally in stocks, the volatitlity index has broken out and remains off the recent lows set a few weeks ago:
4. Bonds remain in a long term uptrend. Bulls want to see yields rise as investors favor stocks over bonds. Instead, bonds have held support recently and remain well above their 200 dma:
5. The dow transports are rolling over. Dow theorists will note that the transports are significantly underperforming this year, hinting at underlying weakness in the market:
It feels like most market participants are expecting a massive rally after Greece gets bailed out again and are afraid to sell. I don't claim to know how the market will react to the inevitable bailout news, but stocks are well positioned for a fall from here. I'm thinking that any push higher (perhaps on bailout news) from here provides a low risk shorting opportunity, at least in the intermediate term. So far I just have a few small shorts on but hope to add more this week.
Disclosure: I have no positions in the above stocks but am short IWM with puts.