Dynamic Hedge writes:
A few weeks back I noted that the market had the potential to “shift gears into full rocket mode or sputter out at the 1700 figure and back fill.” So far, it has chosen to sputter out at the 1700 level. We now have more information and can confirm that under the hood, the market is not as strong as we’d like to see. It is too early to tell if we are in real danger here, but market conditions like usually mean you should ratchet down your risk tolerance: tighten up stops, or move to overall defensive positions. I do not feel that the overall bull run has concluded, but you’ve got to be aware of the warning signs….
For more on the warning signs, read Marketview: Careful of that ticking noise under the hood | Dynamic Hedge.