Behind The Money: Gone In Six Weeks

Behind The Money: Gone In Six Weeks

I'm hearing the word "overbought" a lot this morning from traders and in the commentary I read each morning and NOT that this run is flat-out over. Going into the weekend, the S&P 500 was up 28.5 percent from its 12 1/2 year close hit on March 9. Not bad for a bull market you missed if you blinked.

Raymond James' strategist (and frequent FM guest) presents the following chart in his morning note to clients. It shows that 89 percent of the stocks in the S&P 500 are above their 50-day moving average, a commonly-used metric of momentum. As you can see, that's been the precursor of past tops during the last 6 months.

S&P 500 Chart
S&P 500 Chart

Again, what should happen from here is some kind of short-term 'peak' on a piece of bad news that comes out of nowhere," writes Saut. "Then a pullback that should only encompass 5 percent to 7 percent over a three- to five- trading session period (sometimes it’s seven) before the major averages re-rally."

We told you that 2009 would be the "YEAR OF THE TRADER." We'll reiterate that concept at 5pm and hopefully show you some ways that you can protect and profit during these volatile times, even if traditionally you're more of buy and holder.

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S&P 500