What:  We will remain Neutral for now.

Why:  Over the past several days, there hasn't been too much of an edge present in most of what we look at.  There were a couple of reasons to look for the usual "Turnaround Tuesday", which we got, but other than that it's been a tough market.  While we continue to sport some evidence of excessive pessimism (see the Indicators At Extremes table below), it's not exactly overwhelming, and we've had that for awhile without a sustained rally in prices.  That's been the most troubling aspect of all - the S&P should have broken above 1105 last week, but instead it failed miserably to a new low, and couldn't even rally much when the STEM.MR Model hit an oversold reading.  That's not what we see in healthy markets, and it's usually not what we see when a market is trying to bottom.  The window is still open for that multi-week rally to take hold, but the past week hasn't been encouraging and it's not going to remain open forever.  As it stands, given the lackluster price performance, we're just going to keep sitting on the sidelines in the short-term until a better risk/reward situation pops up.

What:  We will move to 25% Bullish if the S&P 500 cash index trades above 1080.  We will move back to Neutral if it subsequently trades below 1040.

Why:  On April 15th, the Dumb Money pushed up to 75%, and the spread between that and the Smart Money reached to -45%.  In addition, we got a tremendous surge in the number of bearish (for the market) Indicators At Extremes.  After we got the expected weakness and volatility exploded higher, we experienced a very unusual situation with the "shock day" on May 6th.  We looked at somewhat similar days on May 7th, and the conclusions were clear - a short-term rally was likely, probably being capped at a 62% retracement of the crash, then a re-test of the panic lows.   Since late May, we've looked at quite a few  bullish intermediate-term studies - we got a major surge in pessimism, then several positive breadth thrusts and positive price performance, all in the context of an ongoing bull market.  That has led to consistent and significant gains when looking over the next 2 weeks to 1 month.  However, June 4th's Payroll Report kneecapped the nascent rally attempt and took us to a new closing low.  That is very unusual given the studies we discussed and cannot be dismissed, so we will have to wait for either better price recovery or another round of extreme conditions to become bullish again.