"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

As investors begin to get their hopes of a recovery, today is the 5th of May, marking a holiday in Mexico known as Cinco de Mayo. Given the warped sense of humor of the button pushers at the major Wall Street banks, the set up for investors could indeed be "Sinko in Mayo".

I'm not kidding! The evidence of another large advance is working against the markets. For example;

1) In recent weeks, insider selling has picked up dramatically- See Charts

The recent rally has been sparked by mutual funds and pensions funds buying in fear back of under-performing their respective benchmarks. When you couple this with constant opinions from financial entertainment TV, you have a couple of groups of investors who are usually wrong at important markets inflection points.

If you follow Relative Strength (RSI), you'll see that the momentum indicators of many stocks are very overbought, a condition that needs to be worked off before another advance can take place.

In basic terms, a stock qualifies as overbought/ overextended if its RSI is around 70. A stock that is oversold usually has a RSI of around 30. Here is a list of blue chip stocks and their current RSI values over the past 7 days, and 7 weeks;

BA= 75.86/ 64.83
AA= 77.35/67.45
AXP= 75.67/76.79
CAT= 83.62/69.08
DD= 70.60/75.24
DIS= 80.13/71.87
IBM= 73.51/72.34
HPQ= 69.73/68.31
INTC= 73.28/68.61
MMM= 76.25/67.54
T= 72.86/ 63.20
UTX= 73.45/70.82

How about these numbers on some hot tech names;

AAPL= 82.67/ 82.58
RIMM= 78.38/ 79.49
GOOG= 73.28/ 75.34

These numbers are clearly flashing caution. Traders may want to use the inflated RSI's to take profits and wait for a meaningful pullback.