The market ignored me yesterday and decided to skip the small move down and run up to 3250-3260 into Wednesday, as just went straight for that upside target yesterday. This morning it's up a little as I guess it didn't kill the last bear... LOL. I'd say at this point most bears have giving up and flipped to bulls.
They are expecting 3300 next and then that gap fill on the ES Futures from the 2/21 drop into 2/23, which is around 3328 I believe. But here's the thing, if everyone now see's that level and has flipped to long looking for it to get hit (which I'm sure some are looking for the double top in February before the crash), do you really think SkyNet will go straight there? I don't, as I know (well, think I know... LOL) that they plan to take it to the 3600 area into October.
That move will fill the gap and then some... which means they can fail to fill it on this go around and drop the market some for a pullback to just below the 6/15 low where I'm sure there are a ton of stops from the bulls. That's 2923 on the ES and 2965 on the SPX, so a hit (or pierce) of 2900 still seems likely into August before that big final rally up to 3600 to top this out and setup the second drop back down to the March 23rd lows. As for today, who knows?
It's Tuesday where turns are common, so my best guess is strength in the morning and a move down in the evening. The longer they hold it up near the highs this morning the more bulls they can get trapped long looking for 3300 or more. And the closer they get to that level is even better (sorry bears). Yeah, it looks like it's going to just keep on climbing up, up and away here, but be on the lookout for a surprise drop.
There's still lot's of distribution going on behind the scenes. I'm not buying into this rally with the SKEW continuing to hit extreme highs. Yesterday it closed at 145.90 and of course we all know how low the put to call ratio is now. Everyone is massively long here and that can only last so long until it's their turn to get taken out. It's coming, and I think it happens this week. I wouldn't be surprised if we started down and hit 3000 by this Friday. Yeah, crazy call but when the drop starts it takes the elevator down, not the stairs up like the bulls. Have a blessed day.