We are now into the 28th day of sideways markets. The last 9 days are especially ominous with the market coiling in a very narrow range. Any minute all hell is going to break loose. Our educated opinion is that the break will be to the downside, but the direction is absolutely uncertain. As can be seen here from the S&P chart the market is perfectly set up for a monstrous Kilroy (H&S) bottom. What makes this more likely for us is that the Industrial upwave has not reached the same level of the S&P, meaning that it could (and the entire market could) round over and test the March low. When the market is in doubt do nothing.
There have been a number of days lately which looked very fishy. Market up radically in the last 30 minutes and volumes very low. We wonder if large put sellers are protecting their possitions. Too bad we don’t have an SEC that has interest in that kind of thing. Maybe we will see some real fireworks around expiration time.