Since the August bottom, rally tops have been marked by very low volume with a top following in 0 to 2 days. Given that the IWM remains below its previous high and is now approaching resistance at the 50ma with today's volume being the lowest since last week's low, a short term top is probably imminent. We also have the 5ma of the TRIN at 0.65 with today's reading at 0.47, and the McClellan Oscillator in overbought territory. A wave ii or b pullback into Friday's close is the most likely scenario.
I had to leave for a meeting at 2pm today. With the low volume and an approaching top I decided to take profits in my ES position at 1186 just one point below the R3 pivot for a gain of 111.25 points in 5 days. Instead of trying to short the upcoming pullback I will be looking for another chance to get long for a move to the 200ma probably around 1250 to 1260. A 3 to 4 day pullback should do the trick.