The market last week showed some signs of toppiness, including a down gap (see below). The overall context as seen here is still quite bullish, but the time to plan for trouble is before it starts. This being the case a conservative stop is set at 3084.
Of course tighter stops can be set –for example at the previous wave bottom of 3214 on penetration. We have often muttered about investor reluctance to scale out. Once you are out you just get back in. In fact lightening up a portfolio at this point is not an unwise thing to do.
Numerous charts look like the top chart and we think they can be treated in a similar manner.