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Tuesday, February 14, 2012

Reminiscent of Galileo Thermometers

The market started with a gap down, and was actually in a down trend all day through 3:30.  SPY was barely down .7% down from the multi-month top, but it surely felt like the sky was falling.  Why, because the market has been going up relentlessly for months.  All the dips have been bought.  Just look at the last 9 of of 9 candle sticks on the SPY daily chart.  How "buoyant" they are?!  They reminded me of Galileo thermometers (OK, I didn't know what they are called and  I had to look it up.)  The rare intraday down trend into late day felt like a rain drop in a prolonged drought.  The bears are so desperate that any hint of selling feel like the one overdue correction.  But all hope was lost in the last 30 minutes of trading. The bull came back with a vengence, and finished the day on HOD with volume.  This price action is usually a prelude for a green gap by the way.

I am beyond frustrated by now, being a bear since second half of last year.  I've been transcended.  I am in awe of the market manipulations by the Fed, the power of American politics, and the degree of ruthlessness without mercy in their MO.  In a way, though, it's a show of their insecurity.  They can't afford to give the bears any sign of hope, as any hint of market weakness will cascade down. The bears know the truth about the underlying troubles in the market, but any such hint must not be allowed during the presidential election year.

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