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Thursday, March 11, 2010

Pushed To The Edge

Had I taken what I thought was going to happen today and put it in reverse, i would have done quite well today. I had expected a gap up this morning, but the unemployment claims report lilled that idea. Instead, we got a hefty drop at the open, and that was what was faded. The tell tale signs of the program traders started to appear an hour before the close (they were likely trading all day, but didn't get a chance to front run the big money until the last hour) and up we went, right to 1150. We now have a perfect setup for a double top, which was probably deliberate to suck in as many shorts as possible, trying to anticipate a drop tomorrow. I will be very surprised if we don't break out, at least high enough to pop a lot of stops before the buying ceases.

The Nasdaq is approaching the "target" I have set for it, although if we do get resitance there it will probably be coincidental. CMF is now quite high, and this has 5 of the last 6 candles closing at or very near the top of the day's range.

The Dow, on the other hand, is hitting resistance at the midpoint of it's range, and despite a nice gain today, appears to be struggling. Some commentators believe this is bullish for the overall market (the ow being the "safety trade") but I;m not so sure.

The Russell 2000 is right at the top of it's range ("range" being subjective here. Until we get some resistance, I have no idea where the real top is), and showing no signs of slowing down. Any shorts here have long ago  covered, so this seems to be actual accumulation going on.

The masters of market manipulation, the financials, are now leading the market up, and with them breaking out to a new high yesterday, I tried to establish a new top for the range. With the aid of a fibonacci grid, I came up with 16.07, which looks preposterous, but I think it is do-able. When patently stupid rumors from Gasbag can skyrocket the likes of C and AIG, it won't take much.

Last month we had a near failed 30 year treasury auction. This month we had 10 year and 30 year auctions that went so smoothly, so perfectly that, if you were the paranoid type, you would think might be, oh, tampered with? Good thing I'm not the paranoid type.

I will have the new highs update in a bit.

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