All anyone on the financial networks could talk about last week was the strength of the "Trump rally". Perhaps we are getting ahead of ourselves. The Standard and Poors 500 Index (SPX) closed today at $2164, unchanged. This is the fourth day that SPX has essentially traded sideways. By contrast, the Russell 2000 index (RUT) closed at 1299, up $16, and set a new all-time high. RUT set its previous high at $1296 on June 23, 2015. Both SPX and NASDAQ have set new highs this year, but RUT stubbornly lagged behind.

From the market lows on 11/4, SPX has gained 3.8% through today's close, but RUT is up 11.7% - wow! The smaller companies, represented by RUT, are largely the high beta stocks, the stocks whose prices tend to outperform the market both in bullish rallies as well as bearish corrections. These are the classic "risk on" stocks. The fact that RUT finally woke up and is now leading this market is very bullish. But can this rally continue?

SPX is looking pretty tepid at this point. SPX traded strongly higher through Wednesday of last week, but has traded sideways since then. Whether one looks at price to earnings ratios of the broad market indices, average dividend yields of the S&P 500 or many other metrics, the answer is the same. The market is at a minimum, somewhat overvalued and perhaps significantly overvalued. After all, corporate earnings are weak, GDP growth is anemic and business capital investment is near historic lows. And don't forget the Fed; an interest rate hike is almost certain next month.

Don't mistake me for one of the perennial bears. But I don't own any rose colored glasses either. I think Trump's economic plan has merit and will drive an economic revival, if it gets implemented. But that may be a large "if".

Non-directional trades are well suited to this market. I opened a large number of SPX Jan 2017 iron condors at 1960/1970 and 2280/2290 today. I am also looking at diagonal call spreads on the financials, like GS and JPM. The beauty of these trades is that they allow for a little slowing or even some pull backs as the market contemplates a new administration taking office. Don't get caught up in the euphoria. As always, manage your risk.