Today's Update:  We will remain Neutral for now.

Why:  Yet another day of (relatively unlikely) upside follow-through took the major indexes through initial resistance and closer to what should be stronger levels.  In the process, we registered a few more extremes among our shortest-term guides, most notably the Down Pressure indicator, which is now at its most-stretched level in the past 8 years (see below).  Whenever we get a strong push out of an intermediate-term low, we get short-term overbought...and then just stay there as stocks continue to rally.  So that will definitely be something to watch for this week, with further gains being an excellent sign that the longer-term pessimism that we looked at last week is reversing enough to get those folks back buying again.  Whenever we get a market that reaches high levels of pessimism, then gets short-term overbought - and then the market rolls right over those overbought conditions, it is a good longer-term (1-3 month) buy signal.  For now, though, for the S&P 500, the 1080ish area marks the downtrend line from the spring highs, and the 62% retracement of the late June decline, and if we remained mired in the intermediate-term downtrend then the index should stop before overtaking that level.

Today's Update:  We will remain Neutral for now.

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.   In late May, we 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.  After a brief respite, June 4th's Payroll Report kneecapped the rally attempt and took us to a new closing low.  In the process, we've seen very oversold conditions and some give-up among Rydex traders and individual investors, so we'll be looking for the price action to improve to re-establish a bullish outlook.  That would include either a successful test of the recent lows, or a recovery high above 1120 to break the recent pattern of lower highs and lower lows in the S&P 500.