Fussy Market Continues

Whether semi-real (Technical Bounce) or manufactured (Plunge Protection Program Bounce), the market is still fussing its way through a potential short-term bottom. I won't bother going through the Weekly Jobless numbers or Durable Orders data from this morning. It's all bad, and it's all worse than expected, which is starting to be the new norm recently. Nevertheless, pre-market futures are up slightly (although they came back a bit on the data release). When worse than expected becomes the new norm, the market has a decent chance for a technical bounce, but the bounce can be fussy before it bounces, and the follow through doesn't lead to a sharp uptrend.

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

Here is a 120m chart of the SPX:
(click on image to enlarge)

Notice on the Daily chart that the price action the past three days is very similar to the price action in the middle of January (boxed highlights on Daily chart). The possible pseudo Tweezer Bottom right now is fussing around just like it did then. The current short term range has been set (pretty much between my two support and resistance lines I've had drawn for the past week). I can speculate all I want within the range, but until the market closes outside the range, it's still in the short term range.

Also notice the Reverse Head and Shoulders forming on the 120m chart. Again, the pattern is fussy on the right side, but it's still forming. And again, the range is set, and it's the range until it isn't the range.

I speculate that we won't see a Bottle Rocket Bottom but rather we'll see more fussing around for a little while this morning before the market decides if it's finally past the latter stage of the pukes, which is the dry-heaves and shivers. The shivers may be starting to subside, but the market is still at risk for a couple more dry-heaves before it can overcome the gags on all the news lately and try a modest Technical Bounce. We'll see what fun today brings.....

7:37 am MT: Early-day Update: The initial thrust after the open off of the positive pre-market futures took the market right to resistance, where it's wiggling and flopping as I type. So far the price action is going pretty much as expected. The fun has already begun.....

8:30 am MT: Intra-day Update: The market has made several pushes into resistance, but the pushes look more like a process that is exhausting the market rather than invigorating the Bulls. I think the Fuss and Flop action will continue for a little while longer while the market tries to catch its breath. We'll see if the push can build or if it will flop back down into the middle of yesterday's fuss.

12:45 pm MT: Intra-day Update: The market is at an important intra-day tipping point. A fade below 760 on the SPX and it may drop in to the 753-755 area, which would make it unlikely to confirm a bounce today.

Here is a current 60m chart of the SPX:
(click on image to enlarge)

You can see the market starting to fall through the intra-day uptrend line. I drop through the line and the market is unlikely to pick up enough momentum to confirm a bounce today. That would mean fund managers would have to face the prospect of trying to confirm a bounce tomorrow knowing they will have to hold into the weekend.....which won't exactly thrill a lot of Hedgies.....

12:56 pm MT: Intra-day Update: There goes the mini-dump, just as I warned.

12:57 pm MT: Intra-day Update: That didn't take long, it's already at 756.

Here is a current 60m chart of the SPX:
(click on image to enlarge)

You can see how quickly the Daisies (Day Traders) took the market to the next level once they saw what was going on. The market has gone deep enough that, barring a little late day freneticism, it will be unlikely to come back far enough to confirm a bounce today.

1:02 pm MT: Intra-day Update: The market tagged 755 right on the nose (754.93).....so the fussiness continues for another day.....

Ideally, I would like to see the market come back in the next 50m and try to close in the 775 area today, which would give traders a tailwind going in to tomorrow. It would also give the Bulls just enough to stay engaged, and it would get the Shorts worried about tomorrow.....which, if nothing else, would be fun to watch.....

2:00 pm MT: Market Wrap: The break of the 60m chart trendline that I warned of earlier led to the strongest intra-day downdraft today (a drop of 10 points on the SPX in about 30 minutes). It also made the day unrecoverable for the Bulls, which I also warned. Traders closed the day almost at the low, so the fussy, nervous, "what's the government going to do next" price action continues.

The four-day price action is going the wrong way when you compare it to the four-day Tweezer and Bounce from mid-January that I highlighted this morning. Now the best case scenario for a short term bounce morphs into a Tower Bottom, which means that the market has a better probability of fading tomorrow to the 742-744 lows before trying to build again.....What have I been saying about cherry picking calls in this environment? (Over and over and over again). If you have been following my cousel and keeping trades to short swings, trading very lightly, and looking for stock option trades more than index ETF option trades, then you have probably stayed out of a whole lot of trouble.

We are actually at more risk for another leg down now (Dow 6,900 anyone?), which is a sobering thought. I don't think we will get a Dow 6,500 even though that is the next support level down, but things look fussy at best and crazy at worst. This market does not like the direction of the country right now, and I'll let you draw your own conclusions as to why.....

Right now, I'm rooting for a hold of the mid 740's on the SPX and a Tower Bottom type of reversal. But I'm also not holding my breath.....