Bulls Keep Looking At the Bottom of the Glass

The Employment Report came out worse than expected.....by quite a ways.....and December was even revised downward.....Nevertheless, in keeping with the theme of "everything is bullish that doesn't cause the extinction of earth" the Bulls are staring squarely at the bottom of the glass and muttering to themselves "hey, that's not so bad down there." Pre-market futures actually took a sharp jump upward right after the report, so it doesn't matter what I think, it matters that the Bulls are going to try and push the market up early in the day.

There is one other factor in all of the fun and games today (and yesterday), which is the government "rescue plan" announcement set for Monday. Now, I'm still expecting the same old incompetence, greed, and vote-grabbing as we always get out of congress, but that's me.....As far as the market goes, the Shorts in Financials may be nervous enough to cover, which may have propelled a good portion of the buying in Banks yesterday, and could propel some more covering and buying today.

The SPX is set to open in the 850 area and attack the 850 - 852 resistance zone right out of the gate (at least at the time of me typing this). The Bulls are mounting a fairly serious push pre-market, so the odds on a bullish day are tipped in their favor, especially after they blew off a bad Weekly Jobs Report yesterday. I speculate that the odds are about 60/40 in favor of the Bulls today, maybe a little higher. That doesn't mean 100%, because there is no such thing, but today is looking bullish.

Here is a chart of the SPX:
(click on image to enlarge)

A move above 852-853 would be an indication that the Bulls are really excited about the bottom of the glass and they want very much to push the SPX (market) to the 870 area. I speculate that, if we get the push, then there will be an intra-day pause around 860, before the Bulls gather themselves and see if they can reach 870. A drop through 838 - 840 would be a strong warning sign that the Bulls don't have control over the day, and a drop below 830 would be a strong signal that the whole thing was a false positive.....

As always, we shall see.....

12:00 pm MT: Intra-day Update: The SPX (market) took off and ran right to the resistance level at 870 that I drew out for you earlier today. There was also a pause mid-morning in the form of a Diagonal Channel (on the 5m charts) right at the 860 area just as I speculated earlier (very similar to yesterday at the 840 area). I took profits on half my "paper" call positions just a few minutes ago on the parabolic spike out of the latest consolidation intra-day.

Here is an updated Daily chart of the SPX showing the tap on resistance at 870:
(click on image to enlarge)


Here is an updated 5m chart of the SPX showing the pause I had anticipated mid-moring at 860:
(click on image to enlarge)

This is the kind of day that usually finishes strong (in the old market paradigm). However, I am still scaling out of the majority of my calls in the 870 area on the SPX. I don't mind reloading for Monday, since the probability of a gap is low-ish. We'll see if the Bulls have a flashback to 2007 and decide to close the day strong.

12:30 pm MT: Intra-day Update: This little Gap and Tap out of the latest Diagonal Channel on the 5m chart of the SPX is likely an exhaustion move intra-day and will double back. In other words, use this freneticism to take some profits on your calls. You may want to keep some in case the market pushes higher, but this is a good area to lock some things down.

Here is an updated 5m chart of the SPX showing Gap and Tap:
(click on image to enlarge)

We'll see if the Bulls can hold things in this area, or at least bring the market back to this area into the close after more consolidation.....

12:45 pm MT: Intra-day Update: There's the Double-Back (Double Move) that I speculated would happen.

Here is an updated 5m chart of the SPX showing Double-Back after the Gap and Tap:
(click on image to enlarge)

The key from here is just as I wrote above, can the Bulls hold the area or at least bring the market to a strong close at the end of the day? We shall see.....but so far so good.....