Just as the market got a bit too bearish back in August, it now seems that market participants have gotten a tad too bullish.  The precipitating event seems to be the expected launch of another round of quantitative easing.  However with the market seemingly overbought, valuations back in line and signs of froth overseas it may be time to take a look at taking some money off the table.  That doesn’t mean a market, like this one that is demonstrating a great deal of momentum can’t move higher.  It can.  It just means that on the margin it may be time to start reducing your risk profile.  It has been a good six weeks.  As Howard Lindzon notes it pays sometimes to “protect the ball.”  In today’s screencast we look at some cautionary signs for the stock market.

Posts mentioned in the above screencast:

Panic rarely pays.  (AR Screencast)

Daily chart of the SPDR S&P 500 (SPY).  (Finviz)

The market is overbought, but that doesn’t mean it can’t go higher.  (Money Game)

The market is no longer undervalued.   (Morningstar)

For any number of reasons the market has gone too far, too fast.  (Pragmatic Capitalism)

Todd Harrison, “Everybody is waiting for QE2 to bail them out, but how many people are waiting to sell on that news?” (Tech Ticker)

Have we exported a market bubble?  (The Reformed Broker)

Don’t forget to “protect the ball.”  (Howard Lindzon)

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