14 SEP 2009, Monday

1. US Open Tennis Men's Semi-final 2009
   Roger Federer’s best point in tennis history. (Click to see "The SHOT!")
2. Those of us who like to play tennis can only dream of making a fantastic shot like this. It’s nice to know it is possible. I would say more, but the return speaks for itself.
3. By the way, this market appears to be on a mission...but what is it?
4. Simply put, I was alert in mid February for a possible swing up. After the initial upmove, I waited for a normal retracement...which never came. (I hate when that happens.) I think that most institutional traders were in the same spot and were forced to buy as the market moved too far away from them resulting in this buying panic. Annoying? Yes, indeed. Worrying about it? Nope. There are plenty of ups and downs, all the time. In the meantime, I have to trade the squiggles.
5. The whole move up has been powerful. Much more than I would've imagined based upon fundamentals...since nothing has really changed. My problem has been that I don't chase trades as I've learned over time that it doesn't work out well for me. Instead I look for pullbacks when bullish and pushups when bearish.
6. Currently, the SP500 has poked above the 1044 level which was an October 2008 up spike. Not much resistance there and if it breaks through does it go to the 50% retracement of the down move at 1120 (which has been an important price area several times since 1998) or does it go to the big breakdown which occurred at the 1225 area? I'm seeing alot of talk of these two areas...perhaps too much?
7. Can it do it without retracements? Hard to imagine...but Ms. Market has shown us, over the past 2 years, she can do anything.
8. Or does it fail sooner? Questions, questions, questions.
9. The fast move down in the fall of 2008 trapped a lot of people who had bought stocks. As the market moves up toward those levels, those people may start selling to lock in smaller losses or even break-evens for the lucky ones. Especially, since the odds of this move further extending are not too good.
10. Just as selling panics exhaust, so do buying panics. I'm waiting for my shorting opportunity very patiently...and it is pushing up and getting more overbought so I know which way I'm leaning.
11. I'm expecting another sizeable (> -20%) move down into late 2010 - mid 2011. When and from what price it starts are the only unanswered question as far as my thinking goes. The move is losing upward momentum and I'm taking potshots at it along the way. This SP500 1050-1075 price area is looking interesting to me...and it would "doink" those looking for the higher areas discussed earlier. Ms. Market at her best.