I was wrong. Very wrong right here. Market is not going up.
Technicals are broken. They are not that bad, S&P still holds 1080 level and well above major downtrend which started in January 2008. But they are not good anymore either. All major indices are below 50 days moving average. Of course, that happened before during this amazing rally. And such dips were great buying opportunities. But.
Sentiment is too bullish. This week I've heard at least four guests on CNBC saying that we have perfect buying opportunity in this drop. Bullish sentiment is not a good sign. We didn't have it that bullish since May.
Fundamentals are, by the way, improving. They are just not improving fast enough to catch with the market. Latest earnings reports aren't bad, companies are reporting revenue growth. Much better picture than last quarter, when earnings growth was reported together with revenue drop. There are two remaining problems here though: fundamentals are still bad and main reaction to earnings is to sell everything but huge beat. Doesn't look good.
Political situation is uncertain. I don't believe Obama's "fee" on big banks and other Volcker ideas have any chance of success. But they rattled markets. Let's wait President's Address and see market's reaction.
Of all indicators, only fundies are slightly positive. I had bullish bias since April. I'm changing it to neutral to slightly bearish short term. Long term, I still remain bullish, but if my read is right, we might have serious pullback for several months.