Want to know where Goldman’s profits came from?  You’re looking at it.  Start keeping count in March, because that’s when Goldman piled into the market.  There was nothing like technical or quantitative (perish the word in the context of a behavioral market) about what they did.  It was plain old predator instinct and market experience– the same thing that led us to buy “lottery tickets”.  Well, we had some market models and templates to look at, and they may have had also.  But they had a lot more capital than we did and they moved the market with it — moved it a long way.  After they took a look at the little head and shoulders that formed they decided they could move it some more, and they’re doing that right now.  They have done it long enough now to attract the interest of the public.  Oy vey!  Is this the end of the move?  Nobody knows but Goldman.

Meanwhile, back on the  Nile — or, as they say, de nile is not just a river in Eqypt — it’s also denial, as in 20% unemployment?  not my problem.  Mortgages in trouble but not yet on the table?  Not my problem.  Not Goldman’s problem either, because if they decide to liquidate their positions and go short (a self fulfilling prophecy) they can sell those positions a lot faster than your average auto worker can sell his house (if at all).

Take your choice as to which chart is dispositive — the S&P or the Dow.  The SPX is headed for the next resistance high and the Dow is nose up against resistance.  For what it’s worth the Dow penetration of the downtrend line is officially valid — 7.5%.  Only 2.6% over the horizontal line, but that might be close enough for government work.

The SPX is within a hair of our reversal stop, 991.  That is using Magee Basing Point procedure Variant 1.  Variant 2 has been long since early March.  Do we think that Goldyman has eaten the three bears?  No.  We think there is going to be a big wide mule market for a long time, and in general trading tactics should be employed.