Over the last few days, while there has not been a big S&P 500 move, there has been a lot of bearish options activity. Currently the S&P 500 is below 2100, a level that represents the uptrend line from February. It is concerning that we are below it because it could signal a short-term top in the market. What has come along with this break is a flurry of VIX call buying for June and July. Now while most call buying in the VIX tends to be for hedging these purchases were at the 17 and 18 strike. This leads me to believe that these speculators are betting that the Fed meeting next week will spark a sell-off. After Friday's strong job report it increases the likelihood of a hawkish statement.

When I look at the market I think that there is one main worry: bonds. I think that if bonds start to sell off more aggressively and you see the 10 year US note creep up towards 2.75%, investors will start to worry that there will be a rotation from stocks to bonds. I think if the Fed signals a September hike that this will cause this negative catalyst above. Other then a strong bond selloff I do not see any imminent threats to the market, earnings are weak, but we know that, and Greece has almost become a non-issue.

There are two pivot points to watch. 2080 and 2120. Below 2080 I would be bearish as it would indicate a multi month breakdown. A move above 2120 could indicate a slow and steady summer rally.