SPX 1175 held 3 times....don't hold your breathe for a 4th

I think we are at an inflection point here. I believe we'll either see the market hobble its way back to the YTD high by the end of December or break down very shortly. I'm thinking the latter. If we get the former, then I suspect the market will have unfinished business to do on the downside and the first 3 months of 2011 will be rather rough.

Notice that 1175 has held 3 times now. I wouldn't be holding my breath for a 4th. Sentiment wise, conditions are still not favorable. AAII sentiment popped back to almost 2:1 bulls vs bears last week and Investor's Intelligence sentiment has been at 2.5:1 bulls vs. bears for 2 weeks now. pcr data is also still nowhere close to oversold. This wouldn't be such a concern if price action was still acting bullishly but it hasn't been. Since peaking in early November the market has been sloppy and the chart looks toppy (I'm a gangsta rapper). This latest sideways action looks like as I suspected would happen a couple weeks ago which was choppy sideways action to work off the ST oversold condition of mid November before making another leg down.

It's often difficult and frustrating trying to capitalize on the short side in a bull market. So, be my guest if you dare try it. I prefer being heavily in cash. It keeps my sanity and objectivity intact.