ALERT - All Major Indexes Are Overbought At This Point!

Folks, be careful as ALL major indexes and most ETFs are over purchased at this time:

DOW - http://investertech.com/tkchart/tkchart.asp?stkname=$DJX0X&wt=0&tp=0

NASDAQ - http://investertech.com/tkchart/tkchart.asp?stkname=$COMPX&wt=0&tp=0

S&P500 - http://investertech.com/tkchart/tkchart.asp?stkname=$SPX0X&wt=0&tp=0

A prudent strategy at this point would be to buy PUTS on their respective ETFs (e.g. DIA, SPY).

The main reason for the markets to have taken off from the 03-09-09 lows is that the Obama's administration changed its negative tune and removed uncertainty and provided more clarity for the markets; however, overall fundamental conditions have not changed (e.g. Unemployment, bankruptcies, earnings, housing, credit, etc.).

This is a very simple game if you stick to it - when the markets hit bottom, you buy up and when the markets hit their peaks, you buy down (i.e. short, puts) or simply sell and take your profits.

It took a little over three months from the beginning of the year to hit the March lows and we are now only two months after the lows and have reached the top (in less than three months). Again, this is a very simple game - do not let CNBC and media frenzy drive you crazy and get you all confused - when OIL was 33.00USD, I said load up! Why? Because it was just too low - this is a supply and demand game. Most folks shorted when the DOW was around the 8000 mark and everyone is running scared and covering their shorts to stop their unlimited, potential losses - buyers will eventually dry up and any weakness of any nature (i.e. Stress test) will take the markets back down again - just remember that the markets do not go up or down (on a daily basis) in a straight line.

PS. If no bad news comes out, we may even hit the 9000 mark on the DOW; however, not in a single straight line... For now, do not invest, just trade!

Enjoy trading!