Today's Update:  We will remain Neutral for now.

Why:  After a bit of early weakness, buyers once again came in by the afternoon and the major indexes closed positive yet again.  If they can manage to do it one more day, it will be quite condemning for any kind of bearish outlook.  That's because we witnessed decent extremes in sentiment (such as Rydex traders and individual investors), a "false" breakdown in prices based on an iffy technical pattern, and a short-term rally that has continued to hold up despite overbought conditions and easy violation of what should have been difficult price resistance.  There are more bearish short-term patterns that popped up yesterday, dealing with things like narrow-range days, a vacuum in volume, short-term overbought conditions and the "turnaround Tuesday" effect, but given the strength of the past two days, I'm not counting on them as heavily as I would otherwise.  That would be doubly the case if we open as strongly as indicated now, and then go on to make a higher intraday high after the first hour of trading.  That would present us with the kind of sustained strength we haven't seen for several months, and would bolster the likelihood of a positive longer-term (1-3 month) outlook.

Today's Update:  We will remain Neutral for now.

Why:  On April 15th, the Dumb Money pushed up to 75%, and the spread between that and the Smart Money reached to -45%.  In addition, we got a tremendous surge in the number of bearish (for the market) Indicators At Extremes.  After we got the expected weakness and volatility exploded higher, we experienced a very unusual situation with the "shock day" on May 6th.  We looked at somewhat similar days on May 7th, and the conclusions were clear - a short-term rally was likely, probably being capped at a 62% retracement of the crash, then a re-test of the panic lows.   In late May, we looked at quite a few  bullish intermediate-term studies - we got a major surge in pessimism, then several positive breadth thrusts and positive price performance, all in the context of an ongoing bull market.  After a brief respite, June 4th's Payroll Report kneecapped the rally attempt and took us to a new closing low.  In the process, we've seen very oversold conditions and some give-up among Rydex traders and individual investors, so we'll be looking for the price action to improve to re-establish a bullish outlook.  That would include either a successful test of the recent lows, or a recovery high above 1120 to break the recent pattern of lower highs and lower lows in the S&P 500.