Sometimes breaking the ice is a good thing. This is not one of those times! The SP500 has finally broken the ice located at the breakout point of 1302.67, but is only about 3 points below that at 10:48 am ET. So we have no idea of where the close is going to be and THE CLOSE is more important than where we are right now. But it does say that the breakout above the last Bearish wedge as seen in the chart I mentioned yesterday has now been challenged.

The prior breakout did not hold and now the second breakout is in jeopardy. We may only see a mild correction or something much more significant. According to sentiment data, things were stretched a couple of weeks ago at levels that were last seen at the April 2010 highs. That would indicate the possibility of a significant pullback here, but as we saw in 1999, crazy can get crazier.

Follow “my number” above and decide where you will scale out reducing your exposure to stocks and preserving your profits. Read how to go passively short on my website (see the blue Navigation Bar) and you’ll have the knowledge to get out AND get back in when the time is right. How much you scale out is obviously something you need to decide as an investor.

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