Sometimes it’s difficult to comprehend trader behavior. Yesterday they bought stocks like the bear market was over. For no rational reason. Oh, yes, consumer sentiment, supposedly. Didn’t they know yesterday that GM was coming today? And didn’t they know yesterday that it’s only a matter of time till the next flood of mortgage problems hits the fan? Strange. But ours not to make sense of the market, our to take advantage of it. Right now the SPX has set up a lower high and we are waiting to see if the lows of May will be taken out. This is what we suspect will happen. Alternatively of course the May highs can be penetrated. As we are modestly short on this leg (and still in the bear market mode) we watch events like yesterday with some amazement. What are they thinking? We are now exercising that greatest of all trader virtues: patience.