Yesterday was more bullish than the day's action suggested. The end of day showed no signs of bear activity despite price jumping and decaying most of the rest of the day. A couple things to note: NYMO and VIX are not at places starting a new strong movement upwards, so this rally will have limits. Yesterday we talked about CPCE hitting the upper BB. Last night it closed below it's averages working off most of the effect quickly. 

Basically it works like this: We can't go strongly up until we go down, we can't go down until we go a little further up. So there you have it. A little more upwards action. A drop to maybe the 20 day EMA, and then hopefully to a new high all before the debt ceiling issue hits. If this hypothesis works out, that will create a megaphone on the charts, which is bearish and likely we would be looking at a bigger down movement as the debt ceiling process unfolds (maybe before, maybe after, there is a lot of speculation in this, so let's let price tell us it's plan)

Watch price action. If you played the bull rally here, and bought the dips, no problem, but don't hang out too long in bull until we see a 2% correction at least in the SPY. For XIV, yesterday it was just too overbought, but keep an eye on VIX and SPY. That will likely be my next bull play. Also maybe some TNA too after some consolidation/correction.



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