For now, it's just a very sharp pullback in what is still a rising trend on the SP-500 chart. The bears have more work to do if they want to take control.

The overbought conditions intensified this past week with a couple of huge up days on June 5th and 8th, but then exploded into one of the worst down days in history on June 11th. The wild ride seems destined to continue.

Wild ride, it was starting to get ugly today, but then...

In summary, the short-term momentum is strong. We are seeing some extremely overbought conditions, as traders who had been cautious are now throwing caution to the wind. We will wait for confirmed sell signals before doing any shorting and/or put buying, and will wait for a price breakdown by S&Ps before any positions are established. Meanwhile, continue to ride the uptrend.

"Govopoly in the 39th Day"

Seykota wrote in his seminal book "Govopoly in the 39th Day" that when the costs and consequences of regulation outweighs productivity, that is the beginning of the end for that society. He said we have never been closer to that tipping point. He calls it the 39th day because in a pond ecosystem, duckweed doubles each day. He equates duckweed with government regulations. By the time you reach day 30, the amount of duckweed has become clearly noticeable and rules the pond. By the 39th day, the amount of duckweed suffocates any remaining life in the pond. We are at day 38, or the 11th hour. The average length of the long term debt cycle is 75 years so the current situation of fiat debasement can continue for yet a few more years before the sovereign debt bubble blows apart.