reversal - the markets are always interesting

The markets are always interesting... just as Goldman Sachs was getting chastised by the Senate for making good money at the expense of others, and Greece problems are problems once again not a problem anymore, the markets fail to confirm the downmove on Tuesday, and stage a nice rally today. (Look at commentary on the charts). When a move fails, typically a violent move in the opposite direction will occur, and it appears this is what is happening. Although the market is long overdue for a correction, it seems like it's not gonna happen just yet. However any long side trades should be met with extreme skeptism. Having said that, it would not surprise me if the SPY makes its way to 125 before we try for another hard correction. To support this argument, look at the chart of oil (USO), the market tried to break it below the descending red trendline and the 50DMA. It broke, but did not confirm the break the following day, and now instead we have a break upwards of the 20DMA. If oil goes up, oil stocks go up, and so will the market, so that's why I think a sizable correction is probably still at least a week or two away. As always be flexible with your oppinions, things can really turn on a dime in this fake manipulated market.

has the elusive correction finally come?

Well it looks like the elusive correction is likely happening now. For once we had two back to back down days, with the close of the SPY close of the lows of the day. XLF has broken out of a triangle to the downside. The problems with Greece, Portugal, Italy etc. which have been largely ignored by the markets are finally becoming a problem just as the SPY made new highs, and the S&P rating agency suddenly decides to downgrade Greek bonds... coincidence? If this correction is for real, it will be scary. It will be swift and fast and cause widespread shock. But I think the correction is just that... a way for the big boys to buy cheap shares from scared little fish at depressed prices.

So I think once this correction has run its course, the market will be ready to mount one final parabolic move up. The real depression like crash will not occur until we either see a currency crisis in the US dollar or the Euro, or oil quickly soaring above $150 in a very short period of time which could happen with a crashing US dollar, or perhaps hyper inflation setting in, and these scenarios do not seem too far fetched anymore. But until this crisis occurs, we should be able to enjoy a nice parabolic move in the markets, and a steady decline in the US dollar.

where is the elusive correction?

I was really tempted to scale in some shorts on Friday, and then common sense prevailed... NEVER TRY TO PICK THE TOP... even if it had turned out to be the top, any decline is still a counter trend, and should be reserved to those who are very quick and nimble... the rest of us don't really stand a chance playing the counter trend.

Not much has changed since my last posting. It does not matter that forclosures have skyrocketed, Greece is still in trouble, America is still printing money like mad, unemployment is still a major problem... for now all we should be aware of is that we are in a raging bull market (although possibly the final leg prior to a very nasty unpleasent surprise).

Anyways I said the SPY was toppy back a few weeks ago, and now it is really toppy... although it will not surprise me at all if the SPY were to make it to 125 before a quick scary pullback occurs (say to 110-115 in a matter of a few days)... and it has got to happen one of these days, and that pullback will be the time to back up the truck, and load up on stuff related to oil, gold, or heck even stocks.

For GLD I would expect a pullback to about 108 (or even 105) will make for an attractive entry point.

Perhaps the market needs to wait for an excuse to pullback, perhaps after options expiration this week will be that trigger. Eg. kill the shorts, and whip the longs around playing games and then use the problems in Greece or Portugal to correct the market so the big boys can pick up shares at cheap prices. Then put out some prediction of oil going up to $300, make oil skyrocket, sell all the stocks that have rallied to the little fish before the final crash and the start of the great depression 2. At least that's what I think will happen.