Why this multi-week rally has me on the sidelines awaiting more violence

I would like to take a moment to explain a little bit about how my TA theory comes into play in identifying sustainable vs unsustainable moves in the market.

IMO the current rally was a lot of things, just not sustainable. It is violent, enticing (who doesn't want 3% daily gains), and lengthy (going on a couple weeks now). But the key to identifying what kind of buyers are able to maintain moves such as we are currently experiencing are the manner to which they allow sellers to get ahead of themselves and go "top hunting". Similar to "bottom fishing" top hunting is something that all rallies have and they are healthy in that they allow buyers to take a breather and suck in some gullible sellers into lowering prices for these sustainable buyers to come back in with more bids. These "top hunting" events usually occur at relevant technical levels.

The key to any sustainable rally are healthy pullbacks and they have been suspiciously absent over the last couple of weeks. Buyers can do a couple things to maintain a rally

(sustainable) healthy pullbacks allowing price action to "refuel" buyers for another higher leg

(unsustainable) buyers swarm in at key technical levels with bids, overwhelming sellers and powering upward

(bubble-type) buyers attempt to entice "top hunters" but are strangely absent which creates a void causing buyers to propel price even higher

Given the recent price action over the last 3 days, I'm starting to move towards the Bubble type scenario. This rally was unsustainable and over this 3 day period it indicated that the buyers that started this rally were gassed. This should have resulted in either the unsustainable or sustainable scenarios occurring. Neither did. 3 days of nothing leads me to the conclusion that sellers are strangely absent. This is likely creating a void in price action and although I would not put money on it, it seems to me like we might end up with buyers coming in and filling this void propelling prices higher. Sellers need to Act and soon.

So currently my position is to wait and see. I'm a lot happier waiting for selling to start picking up steam under the prior high (SPY close under 95.50) before getting short. I can only play these bubble scenarios with very tight stops and even then I am not all that comfortable chasing them.

So be warned. Charts this violent usually remain violent continuing in the same direction or reversing just as violently.