I will let the short-term indicators guide me out of my long term positive stance. And during the time I will also look for other stop losses when it comes to anomalies from the expected pattern.

Good luck to ya all!

But in the short run I’m comfused. At the moment I am betting on a continuing rush.

Sure there are some sentiment indicators that rushed too positive too fast, but I would say that many people are outside of the market right now.

According to Hulbert and his indicator of newsletters the situation is bull for the market now.

I observe in NYSE graph another 25/1 in mid-august.

As for the short term, I found the last Investor’s sentiment data too quickly rebounded towards optimism. Comparing the evolution in summer 06 with this one, the rebound of sentiment from pessimistic area has been much more violent. From a bulls-bears differential of 5,5 and in just two weeks it is now in 26,9, almost reaching the excessive optimism area. (I am using as criterion 30 overbought).

Also for the short term and thinking about the futures&options expiration, I have just checked the put-call ratios (cboe’s equity & oex and isee), and they suggest an upward expiration (all of them skewed toward optimism: in fact, OEX closed at the same level as 17th, before FED).

So I would expect an upward expiration friday, followed by the typical exhaustion days which could lead to that pullback you mentioned.

Thanks, Babak.