Market Outlook

The SPX sold off from the 1196 level for the second time on better than expected economic data. First there was the Existing Home Sales data last Monday and then the ISM data yesterday. This portends at least a short term top to come.

The ratio will probably set up for a top by tomorrow:

Also supporting my bearish views, I noticed bullish titles popping in the financial media during the last few days. This is a big change compared to just about a week ago when bearish sentiment was still rampant.

I expect a steep but short correction to start tomorrow or Thursday. I think the market will attempt to rally again next week.