The Nasdaq is fighting to get back to 2014 highs and while it just may make it back I don't think it'll stay there. That will leave the Dow well shy of new highs and make for a failed attempt to break out if what I see happening plays out. But I don't leave my trading strategy up to what I think is going to happen, simply put I'm just not seeing any new setups on the long side that is causing me to want to buy right now. That makes my job rather easy at this point waiting for either the markets to break out or pull back.

If we break out we'll need to see new leaders emerge. Until then I'm staying out of the buying frenzy as I've moved pretty much to a cash position as of Tuesday this week. There are times when waiting and watching is the best strategy and I think now is one of those times - especially now that my market timing signal remains firmly down.

Shaded area marks resistance

Jeff Pierce is a lead trader at Ditto Trade who specializes in momentum trading & market timing. Learn how you can replicate his trades in your own brokerage account and see how his performance has been since June 2013.