It’s time to be cautious.

There are clear signs of institutional selling right now:

• Momentum is slowing down

• Distribution days are picking up

• There are more down days than up days

• Selling pressure is increasing

• The index is barely holding on to its 21 EMA

• There is major resistance above

• Geopolitical tensions are rising again

• Euphoria and froth are starting to dominate the market

The market has already priced in most of the good news, and it would be unrealistic to expect it to simply look past everything and continue marching to new all-time highs. Of course, that’s still a possibility, but the odds are rather low.

All of this is to say: this is not the time to sell everything or short the market.

But if you haven’t already, it would be wise to lock in some profits and reduce your market exposure.

Pullbacks can be brutal, as we saw just weeks ago.

Momentum names can easily drop 20%, 30%, or even 40% when the market declines by just 5%–10%.