I really don't have much to say that I haven't said the past few days, so today's wrap will be short. The major indices were up slightly today but overall didn't do a whole lot. They are still underneath key resistance from early August and mid-June. Sideways action like we saw back in late July that would allow to work off the overbought condition would be great, but who knows if we'll get more. The past two days have felt somewhat like consolidation to me, so maybe that's what we're seeing now.
The market overall continues to be very bullish. There is no reason to think we are going to crash right back down and that's why I am not shorting anything here even though we are overbought (although I do see some interesting setups). I am simply going to wait for the market to show me some long setups that are not overextended and then go from there. I just don't see too many right now. I still see however quite a few stocks wedging higher and riding their upper trendlines. These look to me like they need consolidation badly.
If you're long already, I don't think there is any reason to sell out and go to cash or anything like that. We could pullback, but so far this rally has good breadth and stocks are acting very well. They just need rest, that's all. Good luck Thursday.