Some things never change, and manipulation is one them!
(to watch on youtube: http://www.youtube.com/watch?v=o8iVq-tM-t4)
Yes, the bobbleheads on TV will blame the rally on the IPO release of GM (Government Motors), but it was really just a reason to squeeze out the bears just before option expiration tomorrow. Speaking of tomorrow, I don't expect any move down to occur. If it's not a flat day, then it's likely going to be an up down... but not down, at least not anything worth shorting.
Now the real question is... how far can this rally go back up? Of course I can't answer that, as if I could... I'd be rich and retired on some tropical island, instead of writing a blog about the stock market, aliens, and the Illuminati. Since I'm stil here, you can come to the logical conclusion that I'm just a poor smuck like most of you guys (and gals).
So, scenario one is that this move back up is our wave 2 retracement with wave 1 down being from the 1227 high to the 1173 low Tuesday. That suggests that tomorrow and possibly Monday, we shouldn't take out that high, and will fall short of it at some Fibonacci level.
Right now we are at the 50% Fib. level, but we could easily continue up tomorrow to the 61.8% or 76.4%. Put simply, we have a resistance level at 120.90 spy, which is a double top from Monday, November the 15th. It's also about the 61.8% Fib. level.
After that, we have resistance at about 121.50 and 122.00, and finally the 122.95 spy double top high from last week. If we take out the high, the scenario one is out the window, and we are in scenario two.
Scenario two has the move down from the 1227 high to the 1173 low as a wave 4 down, with one final wave 5 up yet to happen. It should take out the current high, and if my FP on DIA of 118.16 were to match up with the spx, then I'd expect 1260/1280 level to end that final wave up.
Of course after that happens, I'd expect the top of Primary wave 2 to finally be in, and P3 to start shortly afterwards. This could happen as early as next week, or we could fail to take out the current high and instead follow scenario one with some type of wave 3 down to start sometime next week.
Being that it's going into Christmas, I can't imagine them starting P3 yet. It would be more logical to save the DIA 118.16 print until January of next year, and just have a correction start next week, that might simply put in a higher low then the 1040 level from months back.
What level I don't know? Maybe down to the 106 spy FP, which is about 1060 spx... and that's a higher low then 1040 is. After that, then rally up all of December and into January (and possibly early February) to finally top out the market at the DIA print... and end P2 once and for all.
Then P3 would start down in early next year and probably last all year long, making 2011 the worst year in the history of the stock market. Again, I'm guessing at all of this, but I still believe that the DIA FP will be the final high of P2, with a massive P3 down to start shortly there after.
Back to tomorrow... the usual pattern is to have "pause" day following a large up or down move. Since tomorrow is also opx day, you should expect light volume and for the market to have an upside bias to it. At the end of the day of course, they will pin the spy where it benefits them the most. This could be a sharp up move or down move in the last 30 minutes of trading.
I would guess that if they rally up a little more tomorrow morning, and throughout the day, then a small sell off to lock in profits from the longs, and to pin the market at the maximum pain level for the put holders.
Ok, that's about all I got for today. Let's just wait and see what happens next...
P.S. Why do we need a bill to be voted on concerning procedures to follow if the Anunnaki Reptilians attack us if aliens don't exist?