It was a mixed day for the markets with leadership in technology and solid momentum in earnings winners, however today’s action came on light volume and moderately positive breadth. As we have noted, we would prefer to see some basing action or a light fade setting us up for a move higher into earnings season. With the dramatic and sudden change in optimism we can’t help but shake the feeling we are now setting up for a blow off top and a sell off into earnings.

Despite the positive action we are enjoying in many of our positions, we have beefed up the hedges and will be a bit more cautious as we become more extended. Mr. Market could care less what we think and may continue to march higher, but after a strong first quarter and
a choppy start to April, we are not about to risk letting hard earned gains slip.

We were running and gunning at Shark HQ today, but keeping our time frames very short and trimming gains as set ups we have been buying into, came to fruition with break outs and pops.

Despite our raised level of caution, the action was very positive with a break in the Q’s, new highs for the S&P, and solid technical repair in the semis. But with so many throwing in the towel and joining the bullish ranks we think we could see some surprise profit taking. These advances will definitely shake up the bears and will definitely increase the level of bullishness and we are a bit worried about froth. Mr. Market may have much further to go, but we'll stay nimble in the event he once again changes his tune.

Have a good evening.