The bulls have made it through the weekend without any bad news to hit the newswire (yet?) The pattern they are forming with the ES is getting interesting. The way I see it, they have 2 roads they can follow from here. Try and force feed some type of wave 3 and scream the indexes higher (I wouldn't bank on that) or they are forming a bearish wolfewave, which may complete tonight and we see a move down to the 1165/1155 area in the coming days. (I like that road map better)
I am NOT counting higher levels out at all. But as much as the Bulls want "thing to just go back to the way the were" they aren't!! Psychological damage has been done and it will take weeks/months to fix this damage. Now there is always the QE3 quick fix, but with OIL at 85, any type of QE is getting slimmer and slimmer.
Will the Bulls have the Balls to try and ramp this tape straight up without Uncle Ben around to around to stop any more down-age? They could try and force some type of short squeeze, but it is going to take a lot to get the big bears to fold.
They will probable have to take the es above 1300 before we even see the bears that matter start to sit up. I just do not see the risk/reward on the bulls side to try and start a straight up ramp. A stair step type move may be able to get some more buyers willing to take a chance. The higher the pump it off of Thursday's lows, the less and less participation they will get-and it won't take much for the bears to push still weak weak bulls down.
If I was part of the master planner committee, I would take my time with move up. Take little bites, give a little back and defend major support levels. It will create a a better floor for them if they truly want higher levels. If they just try another "all you can eat" type move, the support levels start to widen.
With a plethora of resistance levels ahead, if one of sparks the bears to defend and the spx has to drop 40-50 points to hit the next support level (if they ramp it up without a breather) I am willing to bet 5 cents it will not hold. But if the support level is only 20 points underneath, it may attract some buyers, as the drop will not have had time to pick up momentum.
Being I am NOT on the master planners committee, I will just use the bearish wolfewave that is in play for my reasoning for a down move to hit anywhere up here. The chart of the ES points out the pattern-our members know the upside pivot we are watching next. Good trading. G-
