Risk has been rising, yes? Well, that would have been the case especially if the SPX had continued higher, unabated in the first three days of this week. Instead however, we got the anticipated pull back in the markets (with gold stocks finally feeling the drag yesterday as well) and the question becomes, 'is it [the pull back] real or is it Memorex?'

Just as I do not believe this rally is real beyond being an impressive bear market type, I do not necessarily think the rally is over. That is because of the technicals and the technicals only. As you know, this blog space and the newsletter associated with it have called for an impressive rally on hope and sentiment adjustments. That is why I do not give it the benefit of the doubt now that it is in its latter stages (being bullish was relatively easy pickins a couple months ago).

Risk is rising, but many charts (see commodities a few posts ago) including this one of the SPX, show nothing wrong technically and potential for additional upside. It would be best to put the bulls through a correction here, have them come out the other side more confident than ever, and then... well, you know. The other shoe drops some time after a rise above the SMA 200 is trumpeted by the experts. This is a market that is likely to reward (or at least not penalize) patience.

We will be following the broad markets and commodities, along with the fundamentally superior gold sector, each week in NFTRH.