The S&P 500 has rallied from 1250 to the current 1333 in the last 13+ trading days, which is a gain of 6.6%.  It looks like the chart may be trying to form an inverse head and shoulders pattern, which is bullish, but we may need to consolidate for a few days to fill in that right shoulder (RS). 
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

Inverse head and shoulder patterns tend to break to the upside in bull markets and if / when it does breakout we will be looking for an initial target above 1400.  But, sometimes head and shoulders pattern come back to test the middle of the head before the breakout so there is a possibility, since we are speculating, that we could see a pullback to the 1275 - 1300 area first.  Nothing is ever easy, is it?

As long as oil is over $100 a barrel and moving higher, you might want to get used to seeing this chart.  The stock market will eventually give in to rising oil prices, but who knows where that level will be?  It could be $110, it could be $130, it could be more, but at some point this added expense is going to hit the wallets of consumers in a way that could slow down spending.  That's not what this economy needs right now.

                        
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The put / call ratios of the smart and dumb money are telling a similar story - both temporary bearish for stocks.  The dumb money is getting a little too bullish, which could be bearish for stocks in the short-term, and the smart money has become more bearish during this rally, which also could be bearish for the stock market in the short-term.
                        
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

The 10-day moving average of the smart money's OEX put / call ratio had moved below 2.0 (below on the chart - above in number) last week and the last time that happened was just before the earthquake in Japan when markets started to sell off.  

Does the smart money know something we don't know?  Maybe, but I wouldn't put it that way.  They just have a tendency to get more defensive the more the market moves up, so they don't give their gains back as easily if it falls.  So they are just preparing for a pullback. 

The dumb money, on the other hand, tend to feel like they are missing out on the rally so they get more and more bullish and buy as the market moves higher.

The Smart Money / Dumb Money Confidence indicator from sentimenTrader.com shows a similar story.  The dumb money is already above the cautionary 60 level, while the smart money is still above its cautionary 40 level, but it's backing off. 

                                 
                                    Chart provided courtesy of www.sentimentrader.com

When one is above 60 while the other is below 40, or vice versa, we have a signal.  In this case if the smart money falls below 40 while the dumb stays above 60 it will be a sell signal - although we have seen readings get much more extreme in the past, before the market did turn around.

Thanks for reading!  We'll see you back here tomorrow.