A rare condition is developing with the 5 period RSI over 70 while the 14 period RSI is below 30. Given the lack of upward progress since last week, this is a strong indication that a sharp selloff is just around the corner. At this point, I expect that the broader market will continue to rally into Friday and possibly next Monday, although it need not do so. Only a sharp explosive rally that closes above the 50dema will alter the situation in my opinion.
Today was an NR7 day (narrowest range in the last 7 days) for the Qs and the SP-500. This may mean a sharp move in either direction is imminent. If it is to the upside, expect a fakeout.
RIMM moved up nicely today and CHKP made a 3 month high. There are signs that some sectors and stocks have bottomed even though the broader indexes may move to new lows. The next four weeks would be an ideal time to be filtering for strong relative strength stocks to buy after the market bottoms.
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