In This Edition.... Market Update: Losing Steam  Open Position Update: United Therapeutics Corp. (UTHR), Lennar Corp. (LEN) From the Community  Market Update Assuming today's trading is uneventful and we don't make an unexpected move within the next few hours, we're probably going to end the session a little higher than Thursday's closing levels. And, that'll mean a decent 2.0% gain for the week. The situation is not nearly as bearish as the numbers would have you seem though.  An observation: While the market's been making higher highs and higher lows since July (and really since March), each subsequent high has been less impressive - or weaker than - its prior peak. The same goes for the lows... each low cut a little deeper on the pullback than the prior one. In fact, the NASDAQ's peak from Wednesday was lower than the peak from mid-October; the S&P 500 barely traded above its October peak on Wednesday. [The one nagging exception has been the Dow, which has managed to plot straight support and resistance lines since May.]  In other words, though the bulls are still running, they're losing steam.  So, yes, I'm still ringing my small bearish bell, but I can't stress enough it's the small one and not the large one. I don't think we're going to re-enter a bear market; I just think we need a healthy correction.... the one we didn't get in September/October.  That presents something of a conundrum, since November and December are also two of the most bullish months of the year.  While I appreciate the idea of calendar tendencies, I'll present this sobering reminder - actually achieving 'average' results is very uncommon. In other words, though the S&P 500 may have gained an historic average of 1.9% in November and 1.8% in December, the standard deviation was alarmingly wide.  For instance, over the past twenty Novembers, fourteen of them were bullish. That's good news. But, ten of the fourteen gave us returns of more than 3.0%. Yes, that's good too in terms of odds, but it also skews the average. As for the six losing Novembers in the last twenty, the average loss has been 4.9%.  The last twenty Decembers paint an equally erratic picture. Sixteen have been bullish, though nine of them failed to top the average; it was the top five of the sixteen really skewing the average. Of the four losing Decembers, the average loss was 2.2%.  The point is, though the odds are in the bulls' favor, you'd better be right. If you're betting on the 'average' or norm and this ends up being one of the minority months, it could hurt... bad. And I certainly don't need to remind you that stocks are overbought as is, and there are still plenty of doubters and nay-sayers out there. It's a prime setup for a pullback despite - perhaps because of - the fact that this is supposed to be a bullish time of year. The market has a way of surprising most investors much of the time.  There are a couple of likely landing spots for a healthy correction from the S&P 500. One of them is around 960, which would be a 61.8% Fibonacci retracement of the July/November rally (not shown on my chart). The other is 937, which would be a 38.2% Fibonacci retracement of the March/November rally. Either way, that would roughly represent a 14% correction from the recent peak.  With all that being said, we all know what the market 'is doing' is far more important than what it 'could be' or 'should be' doing.  If for some reason the S&P manages to break above 1102 or so, I can see euphoria overriding reason again and taking stocks even higher up the hill before throwing them off it later. I think that's the less likely scenario though, particularly after seeing breadth and depth remain tepid over the last couple of weeks.    Open Position Update We don't have a lot to talk about today since we cleaned out a big chunk of our portfolio last week, but there were a couple of things we wanted to touch on... including one exit.  United Therapeutics Corp. (UTHR)  Just for a little background on our United Therapeutics short position, we posted a bearish recommendation on it back on September 23rd, when shares were trading at $48.24. Shortly thereafter, that looked like shares had gotten as overextended as they could get. As it turns out, that was indeed the case - the stock hit a low of $40.33 about a month later. It was then UTHR bounced sharply, threatening some of our gain, and coming close to forcing us into a defensive exit on the trade. In the meantime, however, resistance developed at $43.66; United Therapeutics spent the better part of the last three weeks bumping up against that line.  Well, as of today, it looks like the resistance line won the fight - UTHR is headed lower again. I'm still curious to see what's going to happen at $41.00 since that's been a very minor support level before, but we're headed in the right direction again. Lennar Corp. (LEN)  To cut straight to the chase, cover the Lennar Corp. short trade if you acted on our recommendation from October 7th.  I still contend all the residential construction stocks are overvalued and overestimated, as they were never reeled in to an aggregate market cap that was commensurate with the actual demand - even at post-recovery levels - for new construction. That's not a factor here though.  What we're fighting are the comparables from a year ago, which are stupidly low. Of course any measure of home sale activity, lending, construction starts, or real estate prices are going to look like they're improving.... because they are improving. How are these companies actually performing right now and in the foreseeable future though? I expected investors to have figured that out by this point, but it didn't happen. Instead, investors have this idea in their head that they should own construction stocks whenever a one piece of positive real estate data is posted. You can't fight that kind of irrationality. Let's just go ahead and cut bait on the Lennar short trade - cover it at the market.   From the Community Chart Outlooks: DPTR, PLUG, ZHNE  Up-Trend Outlook: SORL, RDEN, TSTC  Charting Forecasts for TSTR, OCLR, and LIZ  Chart Analysis: JDSU, RINO, and CDE Law firms claim Hemispherix (HEB) lied to its investors