Index Divergence Problematic

The indices continue to diverge as the Russell 2000 inches higher and the S&P and NASDAQ set up to roll over threatening to finish off the head and shoulders pattern we have been warning about this week. GOOG sold off in the after hours session last evening so we should have some fireworks today. Frankly the market is set up ideally for a short entry. Our only hesitation is due to the fact that we are in a traditionally bullish time of the month where surprises favor the bulls 70 percent of the time. So, rather than get aggressively short here, we recommend playing defensively, keeping tight stops and not opening new positions.