The bulls appear to be in full control, but I'm not convinced that the rally is sustainable. I just sense the economic growth issues in Europe and Asia as a potential detriment to the domestic economy where President Obama is struggling to lift the economy with the mid-term elections upcoming. It will not be easy given the fragile jobs market, with unemployment near 10% and expected to rise. There are some 15 million Americans vying for the approximate 2.9 million available jobs and this does not even include those job seekers who have given up any hopes of finding a job.

Warren Buffett came out on Monday and suggested that there would not be a double-dip recession. The investment guru's view counters the views of numerous well-known economists, including several who peg the chance of a double dip at 30%. While I do not feel the country will slip into another recession, I do feel that growth will be a struggle in the quarters ahead given the jobs and housing situations. The headline Retail Sales for August saw a rise of 0.4%, better than the 0.3% estimate, while the core number excluding autos surged an impressive 0.6%, well above the 0.3% expected. The retail metrics are positive and could add some optimism to the third-quarter GDP, yet we need to see continued improvement in the months ahead.

I also continue to be cautious given the global risk. News out of Germany reported that the country's investor confidence and industrial production fell. A weak Germany is not positive for the Eurozone and for other major global economies in China and the United States. China showed a positive report this week, but I still see risk in China despite my long-term bullishness towards the country.

On the charts, the major stock indices broke above their respective 200-day moving averages on Monday. The fact that the indices are above their 50-day moving average (MA) and 200-day MA is bullish. Investor sentiment continues to be bullish on the NYSE and recently towards the NASDAQ.

The major stock indices have closed higher in nine of the past 11 sessions. Volume has been relatively light during the recent rally, which is not what we want to see. Watch the chart tops, with the Russell 2000 at 675, NASDAQ at 2,320, DOW at 10,650, and S&P 500 at 1,125. In the past, markets have rallied and then retrenched down, unable to hold on to sustainable gains. I expect this to likely be the case.

I expect selling pressure on a move towards these chart levels. A strong break would be bullish, but we are not there yet. We also need to see rising volume. And while there was some decent support on the charts, I continue to see a "death cross" on the charts for all four stock indices, in which the 50-day MA is below the 200-day MA. This is a dangerous bearish indicator.