Signs are clearly pointing to a top being in within a few days at most.  The high today of 118.17 could very well be it?  The Dam is overflowing now and will soon explode, as the water of worry will spillover into the happy little town of the bulls below.

When that happens, you will see a stampede of bulls as they run for the exits… but fortunately the bears can swim.  The news out today wasn’t actually bad, and some of it was good… at least on the earnings of some companies.  That sparked the early gap up and rally, as some good earnings and a small relief of debt worries of Greece eased fears.

But, it was short lived as the dollar didn’t sell off as expected when Germany said it would help Greece out as a last resort.  That scared those bulls who went long before the open.  They were expecting the usual sell off in the dollar to occur, as Bernanke and gang are so punctual in doing it all the time.

It scared them I believe, and so the bulls sold off hard into to close.  Of course that doesn’t necessarily mean that tomorrow will bring more selling, as Friday’s are rarely bearish.  Another flat day with light volume is more likely.  If however, we do get a close below today’s close… then Monday should bring some selling.

That channel must be broken first of course, and it could happen tomorrow?  I would be shocked if it did though, as this market has been so heavily control the last year that a failure tomorrow could indicate that they are losing that control… and that would be really bad for the market.

I would like for it to be another controlled sell off to either the 1115 spx area, or preferably to the 107 spy area where those fake prints are.  Then a slow grind higher in the summer months to form a nice rounded top on the market, with a really large sell off in the fall.

It’s really what I expect to happen… which means it won’t occur of course.  Hold on… let me call my friends at Goldman Sachs.  Opps… I don’t have any friends there.  Well I guess we’ll just have to play it day by day, and not worry about next month, or year.

So, for tomorrow I expect the market to remain in the channel.  If it doesn’t by some odd reason, and it closes below the channel, then we will need another conforming close below it on Monday before I’d be comfortable saying “the bear is back”.  Remember, Monday’s are almost always bullish… so don’t fall into a bear trap on Friday.

What we need is a large down day with large volume.  We barely went over 200 million shares today on the spy.  I’d like to see 300 million, as that’s a clear sign that the big institutions are selling… which means they plan on taking it down further.  That’s when I’ll believe that ”the bear is back”

Regardless of whether it happens tomorrow or not… we are close, as the dam is hemorrhaging now.

Red

At this point it seems that every normally bullish trader is bearish, but not willing to go short until they see the big institutions go short first.  Can’t say I blame them, as they’ve seen all the bears squeezed into absurdity.  The bulls are probably just sitting in cash, and still in some safer long plays (assuming you can find some?).

Where does the leave us?  Once again… in the eye of a storm.  Yes, the market is waiting for some big news to cause a sell off, or big rally (doubtful on that though).  The housing market is still in terrible shape, but it doesn’t seem to matter to the government, as they have other plans.  What they are… is the real question?

They will tank this market eventually, but when… that’s what we all want to know.  Will it be on the jobs numbers tomorrow?  We did have a down day today, even though the volume was light (only 179 million on the spy).  That should tell you that they are struggling to keep the market up.  If they can’t close it up with low volume, what’s going to happen when the first thug panics and the high volume comes in?  (I mean banker of course).

The dollar exploded up today, which is another clue that the market is closer then ever to a nice correction.  The euro is also tanking, and the Greece debt is still a problem.  Portugals’ credit was downgraded today too.  Everything is pointing to a sell off, as there really isn’t any good news out there to report.  But, the media just does their usual spin on all the news realized, making it look like roses (but it smells like bull crap too me).

I just can’t find any good news to justify going higher. Going long now is like playing a game of Russian Roulette… you’re only click away from death, just like the market is now. As you pass the gun around, someone is going pull the trigger, and there’s going to be a real bullet in the chamber.

But for now… we must wait to see who shoots themselves first? Will it be Obama with something he says, or maybe Bernanke speaking? Or, it could be some news event… but the storm is coming soon, make no mistake about that. I can see the dark clouds in the sky now.

Red

Ever since the March 6th, 2009 low, the market has routinely triggered the computer buy programs at 3pm-3:30pm, and today they were triggered again.  It’s so common now that you can set your watch to it.  Every time there is extremely light volume, it seems that some buy program hits at the last hour of the day.

Of course they activated the computer buy programs at 3pm today, and squeezed the bears once again.  Being a bear in this market should be classified as “suicidal”, as they are being hunted to extinction.  I would tell you again how massively overbought this market is and should correct back down, but again… it’s worthless right now, as the bulls control the tape.

So, I looked around and found a bullish chart (found on the chart pattern trader).  It was really hard to find one, as most charts are bearish, but the weekly chart has room to go higher.

As you can see, the MACD just crossed above the zero line last week, and in positive territory now.  If you ignore the “overbought” condition, and just look at this chart… you would be bullish.  Of course charts are really worthless right now, as the Obama gang isn’t allowing this market to sell off any right now.

So, we wait… until Obama gives the big boys the “Go Ahead” to take some profit.  Of course some news event will be blamed for it, so keep your eyes open.  I doubt it will be the jobs numbers as the new Census Jobs created will probably cause the numbers to beat estimates… which could cause us to rally more.

The Greece ordeal could blow up anytime between now and eternity… meaning you can’t count on that one to crash the market.  I don’t know what the event will be, but I’m sure it will be during a light volume session or holiday weekend… to catch the bears sleeping of course.

Maybe I should forget charting and go back to just bitching about corruption?  Hell… I never started this blog by posting charts or making technical analysis… why start now?  I’ll just rub my crystal ball and tell you that nothing is going to bring the market down without volume… which will come from some bad news event.

Red

Looks like Obama will get the health care bill passed after all (even if the Republicans don’t like it).  Will it be good for the public or bad?  I’ve heard nothing but bad, but I truly don’t know until it’s out and in the system.  Let’s hope it’s a positive, as all American’s need it.

I’m not going into a long post tonight as it’s been a long day for me, and my brain isn’t working too well.  I will say that today appeared to be a simple “fake-out” move, as so many people expected the market to sell off on the health care bill, which of course means the market will do the opposite.

The big institutions knew that many traders went short on Friday, expecting the bill to pass, so they had to rally up and squeeze them out.  Now that doesn’t mean that the market is going to dump tomorrow.  The institutions will first squeeze out the shorts, if they didn’t do so today, and then a sell off should happen.

Besides the short squeeze, the market was also propped up for the passing of the bill.  It wouldn’t look good on Obama if the markets dumped on the very day that the bill passes.  They don’t want it to appear obvious do they?  Of course not.  But if the market dumps later this week, then they can blame it on the jobs report or something… but not the health care bill.

It’s just a game of “slight of hand” that they play.  Regardless, I still believe it will fall this week.  I think the target for the coming fall is around the 107.38 spy level, as that where I caught a fake print back on March 6th, 2010.  Sundancer caught one at 107.82, so somewhere in those areas is where the likely move down will end, or pause.

Of course this isn’t going to happen overnight, as the 1150 spx level must be taken out first, then the 1115 spx will be the next major level.  It’s coming though… I’ll really be interested to see if the month closes out above or below the 1115 level.  That should tell us a lot about the future direction of the market.

Red