It was a good run, but, it has to end sometime. I think today may be a short-term top. Don’t worry too much though…I think the next bullish wave will kick in within a couple of days.

The reason I think stocks are at a top is two-fold. The first hint is just being plain-old overbought. The second reason…take a look at the shape of today’s bar. We saw very high highs, but a pretty substantial pullback to the market’s opening levels. That’s often a sign that the market ran out of buyers, and that sellers are starting to trickle in.

After a huge run-up over the prior six days (from 1214.91 to 1280.26 for the S&P 500), there are certainly some profits to be taken. And, you probably don’t need me to tell you it would be tough for any late-comers to jump on board now….after the fact. A modest pullback would be healthy ‘reset’ for everyone.

As for how much of a pullback we’d need to burn off this overbought pressure, probably not much. I use the 20 day moving average line - currently at 1263.25 - as something of a litmus test. If the SPX can pull back to that level, it should alleviate a great deal of this overbought pressure without completely destroying the bigger uptrend.

All of this could happen later this week or early next week. Bear in mind we may not rebound precisely at 1263, but I think it’ll be somewhere around there. Stay tuned though….stocks are perking up a little as I write this.

Bottom line - I wouldn’t be a buyer at this point. I would be a seller of some short-term bullish trades though.

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