Caution at these levels

Setting tighter stops and refraining from adding longs. The rally is in its very late stage. We will hold off hedging with short positions but simply tighten stops. VIX appears to be forming a double bottom; transports are diverging from the Dow's uptrend, and defensives are gaining. While we could see more money enter the market due to seasonal factors, we would rather play it safe.

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