Notes After The Close

Today's gap higher caused a burst of new 52-week highs and a slight breakout of S&P stocks above their 50 day moving average, but neither indicator erased the negative divergence that has been in place since October. I call today's market action a gap higher instead of a rally, because the net gain above the gap was completely retraced by the close. This shows a tired market in my opinion, but does not rule out another high. In fact, I'm expecting one, and I'll be adding to my overall short exposure should it happen.