Whew, I'll be glad to see April end. Will the old saying "Sell in May and go away" hold true? The S&P500 has bumped back above the 90% mark of stocks over their 50 day moving average. Yet, the insane market continues higher. This is rare even in a bull market. The punch drunk bulls are determined to hold this market up. Everyone knows nothing goes up forever and when the market turns several bulls will get a reality check.

Until then, tomorrow looks like it will probably be another flat dull day with some upside movement potential. If bulls do intend to sell in May a few of them might try to get out early causing a possible reversal late in the day. Then again, a crushing claims number may cause a few bulls to hit the exits early.

The Dow, SP500 and Nasdaq are all showing a rounded top forming on the 60 minute charts. The Nasdaq seems to be lagging some and may still need to move a little higher before the curve rolls over.

I think the top may have been put in a little over a week ago at 875. The last of the bulls are still making their way into their doomed positions and the market slowly but surely is inching it's way down. Could we get a huge down day soon? Maybe so, but don't be surprised if this slow sideways progress continues. The drop will probably happen when even the bears least expect it.

On Friday, the SP500 broke out of the diamond pattern it has been in. Unless we make a new high to confirm this breakout I will continue to have my doubts about this latest push up in the market.

This wedge says it all. After an amazing run up AAPL is running out of room in it's pattern. The least amount of risk is on the short side at this point.

Ka-boom!! Did you see that drop into close?? Awesome, that 875 top looks like it will be solid for now and if the bulls aren't scared they soon will be. For tomorrow, there could be a upward move at the start but it should fizzle out. The direction has finally changed toward the south side.

On Tuesday, SRS printed a very bearish engulfing candlestick. It may move lower and test the lower trend line of the wedge. That's what looking at the candlesticks would indicate; however, I am favoring this being more of a head fake and the final push upward in the market on Tuesday as being the bulls simply refusing to roll over. Many bulls may believe the problems in the economy are solved and were just buying the dip while expecting new highs to soon come. The problem with this is there most likely isn't enough bulls in this pool to push it to new highs. The market really needs to correct first. With this rally being extended and extremely overbought, I believe SRS will grind it's way toward the top trend line instead of testing the lower line first.

Looking at a daily chart, it appears SRS is in a falling wedge pattern. A move back up to the top trend line of the wedge seems likely. Positive divergence looks like it will form on the MACD.

The $BKX moved up higher past resistance so it's pattern is a rising wedge up out of a rising wedge. It is riding up a steep slope of it's lower wedge trend line. It won't take much of a downward swing to break it out of this wedge pattern. Negative divergence is also showing up on RSI indicating the weakness of the trend.

If Friday has a bounce up to the resistance line on $BKX and reverses then a double top pattern will be in play. This pattern will need confirmation by falling below the swing low between the two peaks. If this happens then the measured move down would give a target of 28.5-29.0 for the $BKX.

Her voice can be heard all down Wall Street. The bears have gathered around and there remains one question left to be answered. Will the bears stand by and remain idle or will their claws come out and rip into this fat pig once she hits her high note? Stay tuned.

All three of the major indices are wedging up and close to their apex. This is a very reliable pattern. Although lately it seems the market only moves up it will not last forever. By the end of the week this rally should fizzle out for good.

All the indices are wedging up and showing weakness as they move toward breaking out below the lower trend lines. Negative divergence has formed on RSI. With the percent of stock over the 50 day moving average, the odds are greater for a move down rather than for the trend to continue.

Monday AAPL put in an interesting doji candlestick. RSI is showing to be overbought on the daily chart and volume has taken a serious dive over the past few trading days. It is now over it's 200 day moving average after moving up over 40% without any meaningful correction. I am anticipating the volume to pickup if some selling gets underway.

Since WFC released it's earnings surprise last week, the financial sector as led the market's rally into the clouds in anticipation of more surprise earnings by other banks. Today, GS steamed higher but dropped in after hours trading after it's earnings release. It's earnings also beat estimates but everyone has already bought it. Expect profit taking to occur in banks if GS leads in the selling.

It's been a long extended April fools day lasting now until April 9. The market now has 86% of the SP500 above their 50 day moving average. This is a four year high for this indicator. The banking index is showing a bearish rising wedge pattern which can also be seen on the three major indices. The odds of this rally continuing are dropping fast but bulls seem to keep on buying anyway. When the reversal occurs many of these bulls are going to be caught off guard and strong selling will follow. Watch the selling volume for clues in spotting this top.

It is becoming more clear we are finally in a correction phase in the market. The ascending triangle on the $BKX broke down on Tuesday showing a weakening in the financial sector. My downside target range is 735-750 on the SP500.

One of my favorite indicators is the $SPXA50R. When stocks get either too overbought or oversold then a change in the market's direction is not too far behind. Currently, nearly 80% of the SP500 is above their 50 day moving average. Yes, it can still move higher but this is a good indication of there being a high level of risk in entering a long position in the market at this time. I am thinking at some point this week the market's direction should change. Accumulating a position on the short side has a much better risk/reward ratio to it. Good luck trading this week.

Thursday turned out to be a gap with no crap. Unless the market can push to a higher high above 846 tomorrow I think the A leg of an ABC correction pattern will begin. The SP500 % of stocks above the 50 day moving average is now at 78. The market will eventually move higher but it needs to shake off some of the bullishness first.

Tomorrow is looking like it will most likely open higher but I will be looking to fade this rally. Since the SP500 low of 666.79 we have yet to have a significant correction. Obviously a correction is due. If this is part of an ABC correction we still need to have a C leg. This push up can't get past 832 without invalidating it as being a correction. A .618 retrace of the rally from 666 to 832 would land close to 730 on the SP500 which is where the C leg should take us close to. Good luck trading.

I am feeling good now that my taxes are done. Reconciling hundreds of trades is always a pain....but not this year. I found a nice software that can take the nightmare out of making sure all the trades are correctly accounted for and wash sales calculated. It's called Tradelog. I highly recommend it. Now that I finished my taxes I can get back to focusing on the market. Today (Tuesday) ended terribly and the futures are in deep red tonight. Tomorrow will most likely be another down day. Happy trading!!