Today's Update:  We will move back to Neutral if the S&P 500 e-mini futures trade at 1079 or if they fall under 1055 and subsequently rally more than 5 points.

Why:  On Friday morning we touched on what appeared to be a bearish short-term setup, as the market was at overbought, at resistance, with negative seasonality and evidence of a record-setting buying exhaustion on Thursday afternoon.  That finally translated into a trend-day to the downside on Friday, and as we've seen so many times, it was one of those all-or-nothing affairs, as more than 95% of all volume flowed into stocks that were down on the day (see below).  Most often, such selling stampedes have led to immediate knee-jerk rebounds, but it has been less consistent after that next day.  Some of our most sensitive guides, including the STEM.MR Models, reached oversold by the afternoon.  Usually, when we see the first oversold signal following a period when the market ignored an overbought reading (like it did on July 8th), the market has responded well, so there is an argument to be made for a recapture of part of Friday's losses here.  I don't really see any strength in the argument for a sustained move lower, either, so we'll move to Neutral with a modest move either way.

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.