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Overbought Market

|Includes: ProShares Ultra Oil & Gas ETF (DIG), SLV, XLE, XLK

Another big up NO VOLUME day, and what does that normally point to... an overbought market!

They are sooo happy with themselves, here we are over 10,500 and closing right on the S&P 200 day moving average. But this straight up market probably needs to cool. Although its hard to fight momentum, when they get it running, stand back.

Too me, it was a good day for raising cash levels, placing some shorts and selling covered calls.

I'm still worried about our country's ability to create jobs, we have little manufacturing, no new houses being built and somewhere along the line selling insurance to each other will stop.

Not to mention increased taxes and federal spending. Personally, I sleep better knowing I have some downside protection on my money.

Today I shorted XLE @ 54.25 the XLK @ 22.14 and sold some Aug VXX $22 puts for .65

As I believe we will see some good red days ahead.

Disclosure: Long DIG SLV VXX Short XLE XLK XRT QQQQ SMH