9:12 AM - I spent a long time on charts this weekend. I am more convinced that something big will happen, but short term problems may be brewing. As mentioned before, being a bear in Bull Country is dangerous. Today will be a full admission of that. I remain bearish and nothing happening is changing that until the 20 week EMA passes through the long term trend line in the SPY. This thing could rally to 150 and it will not change that, and "no thank you" I do not want to participate in the run up. If you look at Aug 2011, it pretty much did that. If a top was fully determinable, everyone would figure it out. Because it is not pin-pointable (yes that is my own word), the Bulls cannot see it coming, and the bears have trouble timing an entry point so they sit out and cannot capitalize on the full downfall either.

Here is the issue, we which we already knew: the market is rabid (stark raving mad really), and they are pricing in something that has not happened yet. Even if Washington can agree on anything, the upside will be very limited because of this rally. Additionally, the solution to the F.C. is like chemotherapy and sooner or later the market will figure that out too. "IF" Congress does not find a way to patch this together, then it really is not going to be pretty. Additionally, sooner or later the market will demand an answer or it will jump off the cliff emotionally. But where....

I wish I had a solid answer. From history a one to two week run up to right below the most previous high is not uncommon. Here is where my previous logic may hit a snag: the market is not like a normal run upward. It does not need pullbacks, because the big guys who are running this, know it will and needs to fail at the top, and the best way to ensure that and make some money in the process, is to go parabolic and skip normal P/B's. That creates a bullish sentiment and invites "Chasers".

IWM is poised to strike for today. Early hours XIV looks good too. SPY is the laggard, but will be carried by the other two even if it cannot perform on its own. Then there is a second issue of daily MACD. It currently stands at -.13, and any bullish movements are likely to produce a 0 x-over. This will trigger lots of TA-buyers including several algos. Gaps up with bullish trends are hard to predict, because normally they fill, but if they do not they can be huge movements, so you have to consider probability vs impact.

As mentioned, I want to stay bear, as long as I don't get killed in the process, but we have to accept from time to time, it may not be pretty. I may bail-out of my short today, depending on what I see as the day progresses, but I will post anything I do. Even if I have to bail, we will look for a new bear entry.



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