I posted late in April that this rally was getting long in the tooth. Moving to a more cautious near term stance, I started peeling off long positions and more recently in the past two weeks started short positions using various leveraged short ETF's. As of today, I now hold no short positions, and am 60% long, 40% in cash.
While I believe the market might "chop" around for another week, I believe we are still in a bull market. My conviction is even more bullish every day that I hear the following two phrases on CNBC;
1) 'Sell in May, and go away.'
2) 'Bear Market Rally'
It does not matter whether this rally is short covering, or China optimism or whatever. The more important factor is that it is a rally. My guess is that this is simply liquidity, and money managers caught under invested. Regardless 'If it smells like a bull...' remains are stance.