YIKES WHAT HAPPENED?

THE TRENDS:  The long term trend remains up and as you can see in the weekly SPY chart the intermediate term trend flipped up in a very decisive manner.  Last week I mentioned that there was a possibility that we could see a rally off the 40 week moving average (white line).  However, I was not expecting such a violent reaction to the up side after touching it.  While on the face of it last week's price action was very bullish, most of the upward movement took place on Monday and the day after New Years day.  Thursday and Friday's movement were not very strong at all.

WHAT I WOULD DO:  White it may be tempting to go all in (100%), I would not do so at this point for two reasons:  1)  The market moved too far too fast.  2)  The market is too close to strong resistance around the 148 level, which is the September, 2012 high.  My expectation is that the market will retrace or congest a bit early next week.  If this happens and we get a bullish day later in the week I would start "dipping my toes" in the water by committing perhaps 50% of my account.  Then watch the 148 level for signs to see what the market does next.  Have a great weekend!