The SPY has rallied through the forecasted 130 area on the SPY, and come back down to test it. While this is favorable price action, we do not see corresponding strength in breadth indicators, and sentiment indicators and headline risk keep us cautious. We have felt that the biggest opportunity of 2011 would be a buy signal after a correction, and it is possible that the correction has started now. If so, indicators will become more oversold than they have so far.
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