Bottom Line
While the markets have been sending mixed signals recently, there was no mistaking last week’s action.

The markets reversed sharply after a weak breakout attempt and are back to multi week lows. They are also mired under their 20 and 50-day moving averages after falling on increased volume.

The market certainly appears to be topping out as we head into the summer

In either case, what is important for traders is to realize that the environment is fraught with risk right now.

There are times when it is better to reduce exposure to the markets and wait patiently for the markets to give you an opportunity.

This is likely one of those times. If you are still holding several positions, make sure it is because you have a specific plan you are following and not because you are stuck and unwilling to take a loss. If the markets have a full fledged correction, its possible that much lower prices can be seen fairly quickly. Next week will surely shed more light on where we stand.

from The Chart Advisor