Wednesday, January 20, 2010

Bear Failure

While yesterday was depressing, today was just frustrating. Yes, I made some money personally in my high risk trade but the market again couldn't break resistance and even in a very negative day, looked exceptionally strong. We went down to resistance, that trendline and bounced. What is new? The financials were very strong on what I thought were very weak numbers. Interestingly, the company that was most upbeat was Wells Fargo and that is the stock that is down. They must be living with their head in the sand and are probably the best at the game of extend and pretend.

Overseas you had a major reversal in Asia overnight. China was down around 3% because some of their banks may be having capital issues. That would be really bad!! Than it rolled to Europe and Greece getting pummeled sending the EURO spiraling down and the dollar surging. Hit the U.S. markets, heavy selling, hit resistance and than bam. It all calmed down.

That leaves us in no mans land for tomorrow. I went back to flat on my shorts. The risk reward isn't the same. The bogey is fairly clear. 1130 is hard resistance on the S&P. Unless the market breaks that the bears have no reason to celebrate.

It is really unreal how strong the momentum is and how the market just won't break down no matter what's news. I really wonder if Los Angeles was nuked if that wouldn't somehow turn into a reason for Wall St. to buy. More stimulus so buy!!

Line for tomorrow is clear. We shall see what happens. I leave for Louisiana in a few hours. Probably won't be back on here for a few days.

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