Stage is Set

Wow, I mentioned last night on how light trading volume was worldwide and than we see a day like today in the U.S. markets. I don't know if I have ever seen a full day like it. We didn't break 1 million contracts in the e mini futures. I don't know if I have ever seen that. The NYSE didn't break 800 million shares. I mean, it was like a holiday.

Well the stage is set for the next fall in the markets. Now the question is if it occurs. I have had tomorrow circled on my calendar for a couple of weeks for when a possible top would be in or very close to in. It may not happen but the market has been buying the rumor that the Fed will save the world so we shall see if A) the market is severly disapointed or B) if it is sell the news. I have been thinking we would get a spike and slam down but that almost seems to easy. Everyone seems to be expecting that - even bulls (though they think it would be just a pause)

Assuming I am right that the market is topping there are several ways for this to play out. The market is always interested in max frustration.

A) Max frustration for the bulls

We are never positive tomorrow. The market opens down and sells off all day never looking back at 1120. The bulls were looking for a spike to take profits and never got that spike. Don't put this as very likely because the bears never have it that easy but who knows.

B) Max frustration for the bears

We get the spike above 1130, maybe even 1140, and start to roll over but the market closes with the market above resistance. Bears are sweating. Wednesday comes and the market opens flat to up or moves up some during the day, the bears give up hope and cover. Thursday another bad jobless claims number comes confirming last week wasn't a fluke and the market tanks.

C) Mix frustration for bears and bulls

Big spike tomorrow with the release causing bulls to get more bullish and bears to start covering. Market doesn't last through the day and sells off hard frustrating everyone. This is what would normally happen and I could be wrong, but it seems to be what most are talking about / expecting. For that reason, what I normally would think would happen I don't think will happen.