(Had my Bachelor party this past weekend. Needless to say, I was preoccupied :)
Looking at the SP500 we can clearly see resistance areas, which merits some caution.
The multiple resistances include:
the 1130 level, the 150/200 SMA, the oscillators are fairly overbought. The weekly chart corroborates this as well.
The internals pretty much give the same picture across the board.
There is a clear a technical situation that merits some caution for a potential pull back. If we pull back, I think we test high 1080-1090.
The kicker, however, is Buffett's opinion. He sees no double dip. If the market starts to realize that there is no double dip we will move higher.
The market will move higher because the market multiple is TOO LOW! With no double dip, the SP500 should have a higher multiple than 12-13.
(Keep in mind, current 2011 SP500 earnings is around 87. Multi-nationals have been producing better than expected numbers, and Europe just increased their growth forecast today. Which means the 87 earnings number maybe too low.)
The market is still in a crazy place because a lot of people do not understand what is in front of their face. So some protection is merited, as I took some on today. But I will close it out fairly quickly if we get the decline to 1090