Throw all the indicators and analysis out the window. The only thing you need to know is that central bankers are committed to more asset purchases. It is a global liquidity love fest and a super charged "risk on" environment. Investors are understandably bullish, but a single dollar or Euro has yet to be printed. There have been lots of announcements, but little substance. Next week, the FOMC meets and investors will get to see how much Bernanke intends to put the "pedal to the metal". Hope of QE has turned into reality of QE, and investors better be careful what they wish for as one has to wonder what will happen when the rumor becomes the news.

So here we find ourselves at the intersection of more QE, which has been highly anticipated for months by market participants, and an overbought and over bullish market. I still believe this is a market top, and I am basing this upon the indicators, which I am suggesting to throw out the window for now as central banker interventions distort markets and market signals. Hey, no reason to become roadkill in what might become a short covering stampede that will catapult prices higher. This week's FOMC meeting is the obvious catalyst for that upside follow through. The meeting could also lead to investor disappointment. So who knows? As stated last week, price is the final arbiter, and a weekly close above 1426.68 on the SP500 will likely lead to an acceleration in price as shorts expecting a reversal cover their positions. A weekly close below 1398.04 on the SP500 is a double top.

The "Dumb Money" indicator (see figure 1) looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investors Intelligence; 2) MarketVane; 3) American Association of Individual Investors; and 4) the put call ratio. This indicator is bearish, and just above the extremely bullish level.

Figure 1. "Dumb Money"/ weekly

Figure 2 is a weekly chart of the SP500 with the InsiderScore "entire market" value in the lower panel. From the InsiderScore weekly report: "We continue to see moderately high levels of selling across the market but as we noted last week, from a historic perspective the volume of activity is not particularly egregious. Nonetheless, there is obviously far greater conviction amongst sellers as compared to buyers as the quality of buying events has been generally poor over the past several weeks."

Figure 2. InsiderScore "Entire Market" value/ weekly

Figure 3 is a weekly chart of the SP500. The indicator in the lower panel measures all the assets in the Rydex bullish oriented equity funds divided by the sum of assets in the bullish oriented equity funds plus the assets in the bearish oriented equity funds. When the indicator is green, the value is low and there is fear in the market; this is where market bottoms are forged. When the indicator is red, there is complacency in the market. There are too many bulls and this is when market advances stall. Currently, the value of the indicator is 71.55%. Values less than 50% are associated with market bottoms. Values greater than 58% are associated with market tops. It should be noted that the market topped out in 2011 with this indicator between 70% and 72%.

Figure 3. Rydex Total Bull v. Total Bear/ weekly

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