Keep Your HEAD on Your SHOULDERS

The NASDAQ shot up like a bat out of hell once it successfully retested the 2109 level. Volume was very strong and breadth was around 2:1 positive on both the NYSE and NASDAQ. Semiconductors were on fire up +1.5% and Small Caps joined the party rising by +1.4%. Even Oil was up on the day. End of quarter window dressing was in full bloom despite what some naysayer's may think.

Traders will have a hard time finding fault with today's action; and that is precisely the problem. Remember, the stock market cannot make another big move down when the consensus was starting to build in that direction. Only an upward reversal like we had today would provide the necessary skepticism to convert weak Bears and place them back in Bull's clothing. All expectations were for a rally this week. When the market failed to deliver, disappointed Bulls started to bail. In typical fashion just when the Bulls were poorly positioned for their hoped for rally, the market delivered the entire up move in a just few hours…Whipsaw anyone?

These prior Bulls that turned Bears are probably looking to turn Bullish again. Today's rally was so picture perfect that they will have the ideal excuse to do so. Traders that continue to flip-flop with every alluring move in the market will be destined to trade their way into oblivion.

If You Held a Taser to Our Head:
Obviously the market rally can have a little more room to the upside however there are tremendous obstacles that should keep a lid on significantly higher prices. If the market looked only good enough for underinvested Bulls to look the other way then the chances for a terrible downside move would not be so great. Simply put, we believe that the Siren song of today's market was the exact cruel thing that was necessary to draw back in players before severe pain is dished out.

Don't get carried away…or you will be!

See You Tomorrow

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