A Foot on Normandy

WOW!!!! Exactly the scenario I laid out. For the bears absolutely perfect. That is what we needed. The key was the dollar. When the Fed released the statement the dollar had a huge spike down to 75.83 from about 76.18. This happened in seconds. Than into the close it slowly reversed coarse and moved past 76.18 to 76.40. This is a huge reversal. On a chart it looks like washout reversal. The last holders of dollars puked them out and there was no one left to sell. If that was the case and this is a beginning of a big reversal that would be huge!!

The equities followed suit moving higher from about 9850 to 9918 on the Dow before closing at 9748. That is a 170 point move lower!!! That is a massive reversal.

Is it a top?? Right now the odds favor it but the odds can change if some things don't happen. For one, the dollar has to hold 76 and start moving up higher. This would solidify that the dollar move down was the final puke move down. Secondly, tomorrow and Friday is huge. Tomorrow is very important for the equity markets. You have jobless claims at 7:30 central. This could be bullish or bearish (i would guess bullish). Than the market opens at 8:30 and at 9:00 you get existing home sales numbers out. I have said before and will say again i think this number is going to be bearish and maybe very bearish. Perfect scenario for the bears is the market opens flat to up slightly (don't really want to get above 1065) and than gets slammed again after the existing home sales number comes out. That would be back to back double punches to the bulls and could permanently shift the momentum in this market.

This what bear market rally tops look like. We need some confirmation. First time in about four weeks that it looks like it could be a top. Four weeks ago it was a headfake but if your playing probabilities this is the best setup we have had since than. Now we need follow through.

It is tough rooting against the market. I want America to do well, I want the market to go up but it can't be built on a shoddy foundation. It has to be built on a strong foundation and the market has not mimicked reality ever since 800 in the S&P. It is all a joke. Maybe truth is starting to shine through.