Wringing Every Last Drop of Blood Out of the Turnip

I don’t know about you, but I think this market has limited upside at this juncture. Yesterday’s rally is pretty consistent with a short-term trading bounce that has been developing for a number of market sectors that have been correcting over the past couple of weeks, culminating with OE last Friday. Volume is not great, either.

So, is this a corrective bounce, or is the market going to extend the rally from here? The verdict is still out, but evidence suggests that what we saw yesterday was simply a trading bounce. There is little sustainable upside from here. For one thing, the Trannies have been showing signs of weakness since last Wednesday, and gold is surprisingly bullish going into seasonal weakness, suggesting folks are establishing a more defensive posture here.

In short, the market appears to be making an intermediate peak here.