Market has become overbought. As far as I'm concerned S&P500 still is in the bear market territory. Therefore I had to reduce my risk. I sold most of my long positions yesterday. I made a nice profit in 3 weeks I could not let it go. I'm looking for +2% pull back soon. S&P500 has formed a bear flag(see the chart in pink). At this point I would give 10% chance that bear flag formation come to play, but we must be open to any scenarios. If S&P500 violates 1100 level, S&P500 would tank to 1020-1000.
I think there is at least 70% chance we get a pull back to 1200-1170 support levels then big institutions should jump back in and squeeze the market higher. Please note 1250 will be a major resistance in coming weeks. If S&P500 gets above 1250 it would be the clear signal for a nice bull run. lets see what is going to play out!
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