After taking a few days off to enjoy Thanksgiving in the Smokies, I decided to post this Saturday morning. Nothing had changed since my last entry. The market continued to recover from the brief dip below all major support levels confounding the bears who thought Armageddon had finally arrived. The shorts have been pounded.

But now something is developing. The market is back to extremely overbought levels similar to conditions that have ended recent recovery attempts. Getting overbought isn't the only thing that has caught my eye. It's the performance of the financials and the advance decline lines we monitor. They seem to be lagging a bit.

Go look at the BKX and the XLF. The BKX is the banking index and the XLF is a financial sector ETF. The problem is they've come up to underside resistance just as the broad market is severely overbought. That sure doesn't look good to me.

Also the advance decline lines, including volume, are lagging a bit. Price has moved up faster than these important indicators on the charts. That's not  a deal breaker at this point, but it's a minus not a plus.

But the biggest thing that has my attention is the McClellan Oscillator. It's reached the same REALLY overbought level it touched in early November after a similar 6 day "the bottom is in" rally that started in late October. If you remember that was the "successful retest of the October lows" rally, and it ended up not being so successful.

As a result, I'd be extremely cautious early next week, like say Monday morning. It's the first of a new month with an extremely overbought market in the middle of the worst bear market of our lives. I'd say that's reason enough.

How the market handles the selling pressure that should develop next week will go a long way in telling us whether this time is different. If you're long with profits from this last move up, I'd sell some, especially on any early move up Monday. If you want to go short, this is your spot.