Going In Circles…

The market seems to be like a dog chasing his tail… going nowhere fast!

What can I say that hasn’t already been said?  The market is still in the Twilight Zone.  No direction has been chosen, so it could go either way at this point.  Raymond Merriman has a “Turn Date” window of the 18th-21st… which direction is unknown.  Do we have Santa rally from these ridiculous highs, or do will sell off a little?  I don’t know at this point.

Fund managers will most likely buy and sell some stocks to “pretty up” their portfolios for their clients.  That’s typical for the end of the year, (which might also be the main reason behind the Santa Rally?).  But, at these highs… maybe they would rather sell and lock in the gains?  After all, they’ve had a big rally up from the March lows.

I think a pullback next week to 105 spy, and then a rally to the end of year would be the logical thing to do.  But, what do I know?  I’m just a lowly peon looking for crumbs from my master… Lord Godman Sachs.  (Kidding of course).  Needless to say… I’m not expecting that to happen, but it should!

From a technical standpoint, we had a black candle… which means a big reversal could be coming!  Will it come next week?  Maybe, but I can’t see anymore then a 5% correction down, and then back up to end the year.  We may not get any sell off, as the light volume makes it easy to control the market.  I’m not expecting much, but if we rally to the 112.30-112.50 spy level this week (possible intraday level of 113.00 even number hit), I will go short for next week.

The only way I can see it happening is for some big volume to come back into the market, which the PPT (or whoever) can’t control.  Then the technicals would take over and a nice sell off would occur.  Maybe another scare like Dubai, or something else to spook the market before Christmas.  Otherwise, everyone will be off for the holiday’s and the only trading left is being done by computers.  (Maybe my previous post of Forest Gump playing ping pong should have been the 80′s computer game Pong?)

If not, then I’ll probably just sit it out until next year.  I just can’t go long at these level.  It’s like being the last person to arrive at the party… chances are good that you’ll be going home alone (or waking up the next morning beside someone that you don’t recognize).

Red