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.

This Post Has 2 Comments


    query whether a paucity of put protection and an over abundance of calls – straigh and stradled- being used to ffurl thr markrt higher. I hav found no evidence of overwheming put ptotection and none of the crazy volatitly wrtining ampaign from the fall –yet, As for low volume, Shabaker says blls rund like these will nit be accompanied by bigger volume until the public greats in. Funny have classics from the 30s are alive and kicking today – and more relevant that all but the most scolarly of people Ado

  2. WHC Bassetti

    kevin i didn’t know you knew Elizabethan.

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