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All the selling yesterday and the gap down today… just got squeezed.  It seems that the bears never catch a break.  Will the market continue higher again tomorrow?  They are so close too the 11,000 mark on the DOW, that I think everyone is expecting it now.  Does that mean it won’t happen?

I can’t answer that, but the SPY did have a fake print on Wednesday of 119.35 on the 10 minute chart… which would probably be slightly above the 11,000 mark on the DOW.  Could that be the finally target before the drop?  Maybe?  But we also had another fake print today at 117.65 SPY.  Which one will play out is unknown… maybe up first, then down?

Currently, we are still in the channel up from the 1044 low last month.  We fell outside that trendline today, but rallied up and closed right on it.  The market is slowly starting to crack, and tomorrow is extremely important, as we bears are looking for a close outside that trendline to get the selling started.  A close tomorrow inside that trendline/channel would really hurt the bears that are looking for a sell off next week.

Next week is generally bullish, because it’s option expiration week.  So, that is another strike against the bears.  They are truly starving every bear into extinction.   Will there be any selling next week?  I think they will, but I’ve been wrong many times before.

Typically, they will pin the market on whatever level benefits them the most.  So what level is that on the SPY?  You can look at the open interest at each price level too get some type of idea, but it’s not always accurate.  Looking at the 117 level, there is now 213,816 puts and only 100,087 calls.  That could be the place they pin it next week.  Also, the 110 level, (which seems a long ways away from where we currently are), has 213,749 puts, and only 10,918 calls.

Needless to say… we’re not closing below that level next week!  The 117 level looks more likely, and of course my puts will expire worthless at that level (because that’s the strike price I purchased).  None of this means anything if they decide to tank it next week, (that’s what many of us are hoping for).  On a dump out, you could easily see 50 spx points, which would be 5 spy points.  That would put us in the 113 area, which would also fill that gap up around that level on March 5th.

For now we must simply wait it out, as Fridays’ usually have light volume… which means it’s not likely to do much tomorrow.  I hope it does, but I’m not counting on it.  I’ll just hang tight until next week, and see if they take her down or not?

Best of luck to all of us…

Red

This Bear is just sleeping, but he might as well be dead, as the bulls are killing every last bear out there! Will this poor fellow be next?"

Are all the Bears dead now?  It seems so, as other blogs have given up on the market and are closing up.  Over on Cobra’s blog (who’s isn’t closing, by the way), a commenter mentioned that a blog called “Trading the Odds” is closing up.  He also stated that another blog had closed too, but I’m not sure which one it was?

Then there is my friend Anna, over at Hot Option Babe… who is also very worn out by all the nonsense in the market, and thinking of closing her blog too.  I hope not, and I really don’t think she will.  She just needs to take a break from all the bull shit and go relax on the beach or something.  (Sorry about the cussing, but sometimes you just need to tell it like it is!)

Mole, over at Evil Speculator shut his doors down for a day or so… about a week ago.  But, he’s back up now.  He never really left, just took some time off from posting, is more accurate.  Even Alexander Grant over at AMBG Trading has cut his posts down from almost daily, to once every week or so.  Why post when nothing changes? (Everyone mentioned here can be found in my blogroll… except “Trading the Odds”).

I wonder if it was the same during the 2007 summer rally?  Is that a sign that the “TOP” is in? (Short term TOP of course).  It’s called “Bear Blog Capitulation”!  Look at the the put to call ratio on the chart below.  That’s lower then the reading in the 2007 high!  Every bear that’s still alive is now bullish.  Too many people are on one side now.  This boat has got to sink soon!

It makes you wonder if the government has super computers scanning the Internet, reading the bearish blogs, and predicting sentiment from that data?  Probably…

But regardless of whether they do, or don’t, it doesn’t really matter, as all the bears are dead broke by now.  That’s quite obvious by the extremely light volume.  Looking back at the chart I posted on the weekend, we are now at day 10 of a sideways movement.  But, we did breakout of that range between 1160-1180, so I guess the count isn’t valid anymore?

So, I guess we are going higher again tomorrow, as trying to predict the top is useless at this point.  It will go higher until the government’s target price and date is met.  When?  I still think it will be this week, but I don’t know Jack Shit it seems?  Do you know Jack Shit?  Let me introduce you… (you might have too hit the play button twice?)

Well, there’s your daily humor.  At least I have the good fortune of posting whatever I want, and not just charts like all the other blogs out there.  I’d post another chart if you really want me too… but basically, I’ll sum it up for you like this…

This is the market direction until the Obama Gangster Gang turns it around.

Red

All signs point to a correction to start next week… but will the government allow it?  Just looking at the chart below (found on Cobra’s blog), and counting the days that we have been in a sideways channel, you will notice that the number of days are about the same as all the previous sell offs.

This is not based on the usual Technical Analysis, as most of those charts have failed recently.  I’m simply looking at the odds of a breakout to the upside after trading sideways for so many days.  As you can clearly see, every time the market broke down, except for the November 9th to December 21st area.  But, that area clearly shows a lot of whipsaw action up and down as the bulls and bears fought it out.  These last 8 days don’t look anything like that, as the bulls clearly ruled.  The bears never even tried to have a sell off.  All the other periods look more similar to most recent range.  This leads me to believe another sell off is coming within a few more days.

I think the market will fall quickly to the moving averages around 1120, and then bounce back up.  If they fall again, the 200 dma should be around 1070 by then, and that would be my final target down, before another large rally taking us into the summer months.

Now, does that mean it will sell off on Monday?  Not necessarily… but it could?  I really doubt it though, as the jobs’ number’s were bad, but not bad enough to cause huge selling on Monday.  Remember, most Mondays’ are bullish, and without some global political event happening, I do expect another low volume day on Monday.

I think the event we are looking for is the Fed Meeting.  A surprise raise in the discount rates for the banks is what I expect to be blamed for the sell off.  Of course this could be the one exception, and we could have a break out to the upside.  The odds are that the next move will  down, and playing the odds is about all we can do in this crazy market.

I’m not going to go over all the other TA’s, as they haven’t be accurate lately.  We all know by now that the markets can stay in overbought or oversold conditions for a lot longer then what they appear too be by using the MACD’s,  Stochastic, and various other charts.

Instead, this weekend update is simply about the number of days the market has trading in a range before making a move out of the range.  I could see another couple days of sideways movement before any move down starts (at most).

Looking a little deeper into the past moves downs, we see…

1. A rally up to squeeze out the last bear on January 19th, and then the sell off on Wednesday the 20th.
2. A rally up to squeeze out the last bear on October 22nd, and then the sell off on Friday the 23rd.
3. A rally up to squeeze out the last bear intraday on September 23rd, and then a sell off the rest of the day (which was a Wednesday, with 1080.15 as the high).
4. A rally up to squeeze out the last bear on Friday, August 28th, and then the sell off on Monday the 31st.
5. A rally up to squeeze out the last bear on Thursday, August 13th, and then the sell off on Friday the 14th.

Notice that every time we had a “rally up to squeeze out the last bear”… just before the down move started.  Did we have that “rally up” on Friday?  Possibly, as we did squeak out a new high… which was also done on just about all the previous times too.

Also, notice that most of the sell offs were started later in the week, with 2 on Wednesday and 2 on Friday… and only one on Monday.  So, it could start on Monday… but I expect it to happen later in the week with some news that the market doesn’t like.

What is the news?  Who knows?  I suspect the government will be at the root of the news though… not just bad earnings on a few companies.  So, I’m playing the odds, and that tells me that a sell off is the most likely path next week.

Best of luck to all of us… in this Casino we call the Stock Market!

Red