Market Bumps Early and Fades Late

7:25 am MT: The Consumer Price Index came in slightly better than expected, or in other words, consumers experienced less inflation than expected. This will give the market a short-term boost. I'm not looking for a long-term effect, however, because I can see Energy and Commodity inflation everywhere I go, with my own two eyes, regardless of what the Government Report shows.

FRE beat earnings estimates with a less-than-catastrophically-bad report of -66 cents per share vs. the -93 cents per share expectation. The report will probably give Financials a small tailwind this morning.

The net, net on all this is that the market is getting a boost, the Naz is poised to break above an important short-term resistance area of 2,500, Financials may at least not get in the way, and the current market upswing may continue for another day.

7:45 am MT: I have been busy selling parts of my call positions into this bump up early in the day. I will give some tickers and tallies in a few minutes when I'm done. I'm also holding off on any energy calls since we got a little gap and fade on stocks like CHK. I'm not sure I want to play those yet.

8:00 am MT: I locked and walked on EMR, EXM, IBM, PCP, half the Q's, half the SPY, and half ADBE. I also took a little more profit on FWLT. I'm holding just a little Tech, and I have some Financials in case we move in that area some more today. Here are the tallies: IBM was a 5.6% gain, EMR was a 34% gain, PCP was a 5% gain, EXM was a 47% gain, ADBE is a 12% gain so far, SPY is a 17% gain so far, the Q's are a 12% gain so far, and FWLT is a 26% gain so far.

8:03 am MT: I posted this just a few minutes ago, but I can't emphasize this enough, watch this gap and fade carefully in Energy and most Commodity areas. We gapped this morning and immediately traders took profits. I think I may wait for the Oil Inventory Report in a couple of hours before I decide whether I want to do an Energy play today. Watch CHK as a proxy for what's going on there today. It just Hammered on the 5 minute charts as I was typing this and instead of bouncing exactly where it should, the Hammer failed. There may not be a play in Energy before the Inventory Report, we shall see.....

8:55 am MT: I nibbled in NYX and I'm looking to get into COH. I'm also looking closely at STP, SPWR, INFY, and VZ among other stocks today.

10:00 am MT: I picked up calls on COH and VZ. I am still looking closely at STP and SPWR, but I want them to Flag on the 30m charts for a couple of hours intra-day, otherwise I probably won't get in on a "chaser" entry.

1:45 pm MT: I sold the last of the ADBE, SPY, and Q's calls. Here is the final tally for those three trades: ADBE was a 15.5% gain, SPY was a 16% gain, and the Q's were a 10% gain.

By the way, for those of you wondering what the catalyst behind the late day sell-off was, look no further than our favorite Cult Stock AAPL. Check out the 5m chart intra-day and you'll see some serious dumping. GOOG did the same thing. It looks like the main theme with traders was to dump the Big Cap Tech stocks in the last 90 minutes. And dump they did.....

7:45 pm MT: Market Wrap: The tame CPI report gave the market an early boost. The market was chugging along just fine until some technical levels triggered some selling, especially in Big Cap Tech stocks. The Dow hit 12,993 (13,000 was the round number trigger), the SPX hit 1,420 (the previous peak high was 1,422), and the Nasdaq 100 hit 2,028 (the top of the Bearish Gap which lead to the support breakdown on January 4 was 2,026). In addition, the last Naz upswing was 93 points (0r 3.86%), and the current Naz upswing looks like it may max at 99 points (or 4.07%). It looks like the Lab Chart Technician rang the bell and all the Monkeys took their pellets and went home. Therefore, I locked up my little pellets and walked away.

I am still holding calls on COH, VZ, and FWLT, and I picked up some STP before the close. I like those positions for now. I managed to pick off two of the top three movers from my trading universe today.

Maybe the market will take another look at today's technical areas tomorrow, but if we get close, some more Monkeys may take their pellets a little faster than they did today. Nothing like a little conditioning to train the.....well, you get the idea. JCP and URBN will announce earnings before the open tomorrow, so that will affect COH a little. Tomorrow is also the busiest economic reporting day of the week. Expect Industrial Production/Capacity Utilization, the Philly Fed, the NY Empire State Index, and Weekly Jobless Claims to aggregately affect the market. None of the reports by themselves are big movers, but taken together they will have an affect.

The last thing I'm going to say is this: Can you see why I have been pounding the table several times over the past week to keep your trading to Short Swings? When things looked great this morning, what was I doing? I was locking down left and right! I was right about the current market conditions, and I nailed the correct swing strategy for my trades this week. I have a lot of trades from the past several days, and all have been profitable so far because I was willing to take profits sooner, rather than looking for full, 3-7 day swings. This is once again a huge lesson in assessing from the Top Down and applying the correct strategies from your trading arsenal for the current market conditions.