You can only climb so far out on that limb. Every baby-step towards the end of the branch has you pondering, "Is this the step that sends me crashing down?" Of course, if a 5% drop in the Chinese markets (a leadership index) yesterday couldn't do it, why not take another leap forward? Which is what we are seeing in the stock market today, shorts capitulating. This is a necessary step for a finishing move of any kind. Ask yourself: given the overbought nature of the markets, and the overextended charts of many leading stocks, who would be buying right now? If it isn't short sellers, my name is Simple Simon.
Here is an updated chart from our "broadening top" discussion:
If the most difficult thing to do is nothing, then that is probably the right move at the moment, until this works its way through. Assuming speculating on the short side is not your thing, and you have already booked some juicy profits, there is little edge in the market right now.