ISM Index

The ISM index will be closely watched at 10:00 AM, and should move the market a bit one way or the other.  Economic data has come in better than expected for the past week, but it hasn't elicited a strong upward reaction in the market.   We have gapped up big, with strength coming from Japan, where they have promised more liquidity in order to fight deflation and the strong yen, and in Europe.  The Dubai worries were another buying opportunity.  It is getting quite old, but every dip is being bought, and it is hard to fight that tendency. 

But negatives are creeping up.  According to Investor's Intelligence, the number of newsletter writers who are bearish are at their lowest levels since 2007.  The performance divergence between the S&P 500, Russell 2000, Nikkei, and the Eurostoxx 50 is the widest it has been all year.  American large caps are leading this rally and there are few followers.   This market is getting narrower with small caps badly lagging.  It continues to be a chase for performance.  Today's the 1st day of the month, which is usually a bullish day.  I will wait for extreme strength to short.  Otherwise, I am just going to wait.