Sellputs'  Instablog

   &...   &... The chart you see on the left is of the SPX ie S&P500. I know lots of lines, but if you look closely you can see the resistance met in the first week in may, followed by a candle falling out of the rising bear wedge. Have we broken down completely? Who knows. Here is my ULTRA bear theory:

    To all the technicians out there, like myself, the market looks toppy. Hell, we all know this market is overbought on just about every indicator but this does not matter. Retail trading in my mind has really caused this market to overshoot, just like we overshot 20% down during the "crash". Whatever the case maybe, one fact remains, people are tired. When I say people I mean the kool-aide drinkers who believe anything cnbc and the likes tell them.
    *FOLKS anything hitting CNBC, whether it maybe a popular market theory or sentiment, is old news!! Ill admit i have CNBC on when i am trading, but not for stock tips or insightful drivel. I keep it on in CASE some ridiculous news is first broke on CNBC, like the BS news on a takeover of Sprint by SK Telecom in mid summer 2008. This news came out around noon and it sent Sprints stock flying, only to drop back like a rock after Gasparino corrected himself, scammers.Rant over.

    Anyway, the reason i bring this up is, do you own due diligence because if you do not you may get stuck holding the bag when the smart money turns this market around. CNBC = wanna be smart money but is always late to the party. The reason this market is tired comes down to retail trading being shaken out of the market, possibly because people stuck in these 3x bear products havebeen horrificly beaten down in the near term are losing interest. People who are not seasoned traders, or those who have been forced to trade because they are looking to clear up a wash sale are getting worn out with this daily grind. Bids are beginning to lighten up and volume is getting lower, possibly signaling people simply cant sustain they must stop. When this happens the market will fall, the kool-aide drinkers will sell in a cascade. Disclosure: no position
 

Todays trading action was in my mind a long awaited, mild confirmation of bears waking from slumber. A few things happend today which have not happend in the past selloffs during this two month rally. First there was a bit of squeezing into the close on friday, followed by a bottoming in the UUP. The key observation in regards to todays trading should be the gap held in the am, followed by sideways trading action in a mindly sloping downward trend. Second being the action in the last forty-five minutes of the trading day, ultimately resulting in a close on the days low. This provides strong evidence the bears have finally been able to keep the bulls in the pen. This is all signs equities are becoming weak again. If we can get UUP back up into its channel, the dollar will shore up its value, brining energy prices back down. Could we be in for a repeat of mid march? It is not a matter of if, but merely when.

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