Markets ended Friday with losses for both the Nasdaq and S&P 500 for the second consecutive day. Volume was elevated but still just below normal levels. For the week the Nasdaq fell .6% and the S&P 500 .5%. We raised cash Friday, not for any particular technical reason, just a gut feeling something to the downside may be upon us. Overbought conditions obviously can become more overbought but we will take our chances, as new opportunities arise everyday. The Nasdaq seems the most extended as it lies 120 handles, or 3%, ahead of its 50 day SMA. The S&P 500 lies a bit more than 2% in front of its 50 day, and both coincide roughly with the round numbers of 4000 and 1800. Did we head to the comfort of the sidelines because of the continuing, excessive amount of bullish investment advisors? Maybe it was the underperformance of the small caps, as the S&P 600 fell .75% for the week. The markets yawned at some bullish economic data this week including ISM, new orders, productivity, and employment figures. The S&P 500 Thursday and Friday had weak closes, as even Bernanke’s last speech as Fed Chairman created a small pop in the late afternoon that was overcome with selling by the close. Feeble closes inspire the bears, who did not come out to play vigorously in 2013. They made their presence felt briefly at times, but were never really menacing. Perhaps Bernanke was right in saying he sees a stronger economy in 2014. Could it be a sell the news scenario? This rally is a little long in the tooth now, don’t you think?

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