Friday, January 30, 2015

Hoping for a Flush

We are near the end of this pullback.  It has been exactly 1 month since we hit the all time highs in December in SPX, and we've gone on a little roller coaster ride lower for the past month.  During that time period, sentiment has gotten more and more cautious.  I am reluctant to say bearish because I don't think too many are looking for a huge selloff, just a little more correction.  The market has refused to make lower lows during this time period, despite the growing caution and the stubbornly high put-call ratios.

It leads me to conclude that the selloff is pretty much at the end.  Thus, I am hoping to buy a weak close today, which seems likely, considering that we have a big gap down, worries about Greece and even a little Russia-Ukraine geopolitics thrown in there.  I could be wrong if we are entering a bear market.  There is always that chance, but in the case that we're not immediately entering a bear market, this is a time to buy for another leg higher.  I remain sanguine because of the ECB QE, which will keep the European scarecrows on the sidelines and away from the sell side for a few weeks.  Another is that China is on the easing road and that should be sufficient to keep asset prices firm there.  The only worry is weakness in US from a strong dollar, and the saturation of long term optimism about US equities, but I am sticking to the belief that when crude oil stabilizes, which it is doing now, that should bring the cautious bulls back in the equity market.

Looking for a little bounce off this gap down in the morning, and then a selloff in earnest from European close to the US close.

Thursday, January 29, 2015

Finally a Red Fed Day

Wow, that is what you call a change of character.  A monster down move after a gap up off good AAPL earnings and a dovish Fed.  It looks like we'll soon be testing the lows from 2 weeks ago, and perhaps, even the lows from December.  The sharpest down moves occur at the end of a pullback, and it feels more panicky out there.  It could be trying to pick the exact bottom, but would still like to see a little bit closer to ES 1975 before I pull the trigger to get long.  In any case, I think you have to look long only because the big move from here will be up, unless of course this is now a bear market, which would mean more gut wrenching down moves over the next two weeks.  But a long at these levels should pay off over the coming weeks.  I don't think the bear market has started just yet, but I could be wrong.  It is definitely looking like a much weaker market than what we've seen in the last couple years, and we're overvalued, but the ECB QE makes me hesitant to say the bear market is here.  The ECB QE probably gave this bull market an extension life line of a few extra months.

Looking to buy dips in ES if we get an intraday selloff, otherwise I will hope to buy weakness tomorrow.

Wednesday, January 28, 2015

One Last Push

There is a lack of completion.  The pullback started on the last day of 2014, and it is now 4 weeks old.  Most pullbacks last at most 1 month, so if this follows that pattern of the past, we are almost done with the pullback and we should rally hard soon.  But we are getting incomplete selloffs.  Yesterday is an example, where you could have really flushed out the bulls, but the potential positive catalysts, AAPL earnings and FOMC announcement kept the bulls optimistic enough to pull off a save and V bottom intraday.
When you get these incomplete selloffs, the rallies are lackluster, so it makes the game that much harder.  I still believe that once we get through with the FOMC, the sellers will overwhelm the buyers who have no positive catalyst remaining.  Then we should get that flush out that I've been waiting for.

Should grind higher a bit until we get that FOMC announcement.  I am expecting weakness post-FOMC, not sure if it comes immediately after the announcement, or on Thursday/Friday.  I am looking to buy Treasuries today in anticipation.

Tuesday, January 27, 2015

Don't Ask Don't Tell Gap Down

This is something from ages ago.  A don't ask, don't tell gap down on nothing.  This after a strong close.  The ES is no longer strong enough to overcome European weakness, however slight it may be.  It looks like Superman has lost some of its power.

With the FOMC announcement tomorrow, I didn't expect such weakness after yesterday's relatively strong price action on "bad" news.  But the fundamentals of this stock market have changed, and you can't stubbornly expect it to act like the Teflon King.  Not with big chunks of the market affected by lower oil, stronger dollar, and weak overseas growth.

This market will take some getting used to, but even with sentiment that can be described as cautious, the market still can't get any lift on a non-news day.  Contrarian analysis used to work like a charm for the bulls for so long, but it is more hit and miss now.  A change of character.

I am sure I am not the only one surprised to see such a chunky gap down after yesterday's trading, and with a recently strong Europe.  Now it is looking more likely that once Fed "protection" is gone after their announcement tomorrow, shorts and sellers will run amuck and cause some serious chaos.  If I was long the SPX, I would sell before the announcement tomorrow.  With this incipient weakness, It is looking like a big down day is imminent any day now.  This time, it probably pays to follow the herd, and be cautious.  IMO, this is no time to be a brave bull.

Monday, January 26, 2015

Not So Resilient

This is not your 2013 or 2014 market.  Earlier in this bull market, the market would shrug off something so minor like a Greek election, especially when bad news was expected.  We got the bad news in Greece, and the market sold off anyway despite expecting.  The weak close on Friday was also something unusual, coming so soon after a strong bounce on the ECB announcement.

Europe continues to outperform the US, which is quite a change in character for this bull market.  I don't remember too many periods when Europe was doing better, it usually occurred after a hard bottom and Europe was playing catch up.  Not so much anymore.  It seems like investors are shifting their bets to European equities, looking at how cheap the euro has gotten, and the potential benefits that provides to European exporters.  At the same time, earnings for US multinationals and the energy sector will be weak, due to the strong dollar and lack of global growth.  The theme of US as best house in a bad neighborhood has been beaten to death.  The US equity market is saturated with investor confidence, just when I am seeing signs of long term topping price action.

Right now, I am not interested in bottom fishing euro or crude oil.  Those markets have a deeply entrenched bearish bias that will not be shaken so easily.  Bounces for euro and crude oil will be brief, and not worth playing for yet.

There is a Fed meeting on Wednesday, so I expect any downside to be contained till then.  If there is one theme of this bull market that stubbornly remains intact, it is equities go up on Fed day theme.  Expecting some equity strength over the next two days heading into Wednesday's Fed decision, it should be a nonevent, but odds are that buyers will be more urgent than sellers going into it.

Thursday, January 22, 2015

Risk ON

The sell the news reaction never really came.  It is clear sailing aboard the ECB QE ship.  Greek elections will be anticlimactic as the Germans will cave into Grecian blackmail via the Syriza party.  Over the past 3 weeks, we have seen sufficient derisking of assets and jitteriness ahead of events to leave room for a relief rally from here till FOMC meeting next Wednesday.

The European equity indexes have been rallying for a week now since the SNB bomb was dropped in anticipation of today's news.  But it still has more room to go higher, as a large portion of the investment community was waiting for absolute confirmation to buy stocks.  Draghi delivered. Now that we have the uncertainty out of the way, and we're intermediate term oversold, you will see the market edge higher towards SPX 2060-2070, the last time the market rally took a pause before dipping again.

It seems like the VIX is finally deflating now that the ECB meeting is out of the way.  Unlike the previous rally, this time, VIX is actually following the usual script and weakening as stocks rally.  Another positive.

Wednesday, January 21, 2015

Gameplan for ECB Meeting

Here is the plan for Thursday:  Look to buy dips in ES at two levels:  2010, and 1998.  Will not chase any pops on ECB news, and will just let it run without me.

Expecting a grind higher on Friday all the way into the FOMC meeting next Wednesday.  So I am looking for a dip to get into a swing long.  Greece elections should be a non-event and a relief rally should be expected next week.

Tuesday, January 20, 2015

All Aboard the ECB QE Ship

It is about to set sail.  The ECB QE ship.  Fund managers are scrambling to grab a seat on the cruise ship.  It will be quite a ride.  Europe is much more important than China for the US market.  A China property crash has repercussions, but a European deflationary spiral is a much bigger concern for financial markets.  Europe is decaying but still a hugely important hub of finance, not the US.  There is more financial transaction volume in Europe than America.

An ECB QE is widely expected, but much like QE 2 in the U.S., it will provide a short term boost lasting at least a couple of months which will be a market grace period for Draghi.

I am uneasy and uncertain about this market.  There are conflicting forces, at work, the longer term force of overvaluation and saturation, and the shorter term forces of ECB QE and money managers scrambling for beta.  Also we are 50 points above late Thursday overnight lows, so it is difficult to expect a big rally from here, but at the same time, 60 points below all time highs.  Stuck in the middle.  I will wait.

Friday, January 16, 2015

Opex Forces and Volatility Rising

There are a couple of forces that are contributing to the overnight weakness.  It has nothing to do with Asian markets or European markets.  It has a lot to do with delta hedging, and the options expiration happening today.  When you have a market trading near the lows for the month, as volatility is rising, traders who are short options that expire today have to delta hedge to reduce risk.  Since most of these market makers and dealers don't like taking too much risk, especially in a volatile market, you get delta hedging forces at work, exacerbating a down move.

The second is the strengthening dollar, and the upcoming ECB meeting.  The SPX has a large portion of earnings coming from overseas, and a strong dollar is never a positive for earnings outside the U.S.  It doesn't really affect the market when the strengthening dollar is contained, but when it goes parabolic, like it has against the euro, then you have S&P companies taking earnings hits.

Lastly, it doesn't help that the Swiss have backed away from their Euro peg, because they have been steadily buying euros to weaken the CHF.  Now, you have even less demand for euros, especially ahead of this ECB meeting.  The euro is probably close to a bottom, as the Fed tightening cycle is more myth than reality, and the euro bouncing higher will help the SPX.  So I can't be too bearish equities here, although the supply and demand fundamentals are not that great.  The market is saturated with overconfident buyers who believe V bottoms are a god given right.

If the market can flush even lower heading for the cash open, then I will be looking to buy for a day trade.  We are closing in on the December bottom, and that will attract bottom fishers, which this market seems to have an unlimited supply of.

Thursday, January 15, 2015

European Flash Crashes

There you have it, a flash crash in Europe.  On the Swiss National Bank news, you got the Eurostoxx index drop 3% in minutes, only to go right back up.  Algos gone wild overnight.  Now everyone is expecting a bazooka QE from the ECB but unusually, that isn't really helping the European market as much as one would expect.  And oil is up even more in premarket.  Yet the futures are nearly flat after a huge roller coaster ride.

Treasuries remain extremely well bid and it looks like risk managers are reducing risk here, just based on the heightened volatility across markets.  Despite what many expect to be a QE announcement next week from the ECB, the market doesn't seem to care.  Only thinking about current volatile price action and reducing size just in case the market implodes intraday.  Eurostoxx is outperforming the SPX futures today, so the Europeans are obviously looking forward to a QE announcement next week.

I don't know what to make of it.  The action is just wild and crazy.   It feels like we should be bottoming sometime before the week is over.  Or perhaps yesterday was that bottom, to be successfully retested on this SNB news overnight.

The volatility is highest at the end of moves.    We are close to the end of this down move, just based on the crazy action here.  One more capitulation move lower should be it for this down leg, and then we will probably grind higher again with ECB QE like nothing ever happened.

P.S.  Just saw the AAII Bull/Bear numbers.  From last week, Bulls up 5.1% to 46.1%, and Bears down 6.2% to 21.5%.  AAII has been stubbornly bullish since the August bottom, even staying relatively neutral through the October downturn.  They have been right, but it speaks to the investor complacency out there.  Just something to think about from a longer term perspective.

Wednesday, January 14, 2015

Europe Outperformance

So far this week, Europe has suddenly been a bastion of strength.  Today, despite another big reversal in the S&P after the European close, Europe has managed to get back to the flat line today despite a big gap down.  Europe is trading near levels before the big S&P reversal yesterday.  And that is on top of the strong performance on Tuesday.

I can only attribute this to investors trying to get into European equities now that ECB QE is an inevitability.  It is buying the rumor before the news comes out.  Other than that, there is no reason to buy Europe.  They don't have an overabundance of credit like the US or China.  One of the reasons for this giant China A Shares rally is the overflowing liqudiity there.  There is so much money tied to real estate, if only a tiny fraction of that goes to equities, they can go bananas even though the fundamentals are awful.  I have read of huge influx of recent retail account openings in China as the market goes parabolic.  It will end badly there, no doubt.  If only I could short the stocks those retail investors are buying....

S&P looks saturated with investors is weak, those looking for a V bottom got foiled yesterday.  The V bottoms have been so powerful, and so long lasting over the past 2 years, that it is just a reflex reaction to pile in and ride the V higher when there is a big gap up like yesterday after a couple of down days.

On the crude oil front, I am seeing a bunch of articles, and interviews with the vast majority believing that crude oil will go down to $40, or lower, before rebounding.  Among them Goldman Sachs, known for doing the exact opposite of their recommendations.  These were mostly the same analysts and experts who said crude oil selling was over done when it was trading at $65 a couple of months ago.  

I think crude oil bottomed yesterday overnight at $44.20.  Crude oil is now stabilizing and starting to outperform the S&P.  I doubt we go below $44.00 this month.  I will be looking to buy crude oil very soon.

Due to opex forces this week, I am leaning towards weakness till Friday if we can go below SPX 2000.  Waiting to buy a capitulation later this week.

Tuesday, January 13, 2015

Wild and Unexpected

Last week followed the classic 5 day pullback script, with a V thrust with back to back huge up days to make back most of the losses from the pullback, only to see it crumble since NFPs.  Today we have another giant fake out, something that completely surprised me, on NO news, gapping up huge, extending those gains, and then dumping big time since NY lunch time.  Rarely have we seen such a big gap up extend its gains in the open, and then completely fall apart.  The only time I can remember such an intraday turnaround that is somewhat similar, with a smaller gap up, is on December 11, at SPX 2055, before we went down to SPX 1972 a few days later.

And the scary thing is you can't even blame oil, because crude oil made a bottom overnight, and has been rallying from those levels, despite an S&P that is falling apart.

This is a different animal.  I haven't seen this kind of wild volatility near all time highs since 2000.  2007 wasn't even close to being this wild.  There is a good reason that VIX futures are well above 20 now, and even after back to back rally days, refuse to stay below 18.  What I suspected from the suspiciously high VIX levels after 2 monster up days in December has proven to be true.  We are now in a higher volatility regime.

VIX futures are trading higher now than a week ago when the SPX was at 1992, even though SPX is trading at 2010 at the moment.  So you have a market that is higher than last week's lows, but the VIX has broken out to new highs anyway.

The VIX buyers have had sand kicked in their face for so long, this is a totally new thing for them.  The volatility buyers are no longer getting bullied and are the ones doing the bullying.

I am still uncomfortable shorting this market, but I do believe we will go lower in the coming days, perhaps we'll get a bad news bottom, like we did with the ruble crisis in December.  A bad news bottom near SPX 1960 is buyable.  This market is badly in need of a big flush out to purge all the early dip buyers out of the way.  Otherwise, you have a low probability buy setup that can reverse just like today.  Waiting for a big flush out to buy, otherwise just watching with hands off the buy button.

Oil Bottomless Pit

Those who have been trying to catch the bottom in oil have gotten seriously damaged.  It has even spilled over to equities, but today, the equities are shrugging off the overnight weakness in oil as Europe is getting excited as QE is nearing.

This crude oil fiasco will pass, and that is when you get a rip roaring rally that will leave the bears speechless.  This is still a bull market, an aging one, but a bull market nonetheless.  The path of least resistance is still higher, so that has to be respected.  We are getting another monster gap up despite weaker oil.  We have shaken out the weak hands, and yes, VIX is stubbornly high, which is worrisome if you are bullish, but there are more bullish factors than bearish factors at play.

This week should eventually grind higher as oil stabilizes here, with the steep contango, these are fire sale prices that will not last for long.  If oil goes back to $52, S&P will be back to all time highs.  That is a big if, but that is how much weak oil has dampened investor sentiment in stocks.

Monday, January 12, 2015

No Terror Gap Up

This is what I call the European chicken little gap up.  All the Europeans afraid of another terror incident over the weekend hedged by shorting futures and unwound the hedge when there was no incident.  It sounds silly, but these fund managers just watch news and charts all day, and if we close near the lows and there was bad news that day, they tend to crawl up into a shell, a chicken egg shell, and act like scarecrows.

Anyway, the Americans are coming in to show what the real market is, and bringing down the terror gap up, as the futures gap up shrinks by the minute.

There is clearly a different feel to this market.  It is being pulled from two sides, on the one side, the fund managers acting like it is still 2014 and buying with reckless abandon, and the other side, the natural force of a weak stock buyback market that wants to go down due to weakening global economies and lackluster earnings.  In the end, the natural force will win out, but not without a fight from the johnny come lately fund managers.

Oil is getting crushed again, and it is clear as night and day to me that it is not just supply driven, but a big chunk of this oil weakness is weak demand.  China demand for commodities is dropping off a steep slope and it is something to keep an eye on.  Unless the PBOC comes guns blazing, there will be a financial crisis in China, just as retail is all abuzz over there about stocks again.

No good feel for the day, I will be looking to buy if we can a little flush lower, this week should eventually go back higher after the V bottom last week.

Friday, January 9, 2015

Tougher Game for Bulls

It isn't going to be so easy for the S&P bulls to have their way this year.  Yes, they still seem to have the upper hand over the bears, but the edge is much smaller.  If we were in 2014, today would be either a flat or an up day.  After a 2 day up move off a seemingly another V bottom, we are down 20 points from the highs.  A good jobs number was bought in premarket and actually traded like the distant past, when good jobs numbers gap ups were often sold.

It is a bit of a confusing time to read this market, because both sides are much more even.  When there is clearly more buying power than selling power, it makes it more comfortable to be long.  And if there is clearly more selling power than buying power, it makes it more comfortable to be short.  But the recent price action is showing me that both sides are close to even strength.  That makes it tougher to make trades with conviction.  And without conviction, it is hard to make big money.

The main opportunities that I can take with conviction is deep oversold dip buys in S&P close to former support areas, around 1960, and if that level fails, then 1900, or buying Treasuries when S&P looks overbought and sentiment overly bullish.  Right now, we aren't in either scenario.  It is just slop and chop in the middle of the range.  Perhaps occasional day trades but no longer term trades at this time.  I am out of the Treasury long entered this morning pre-NFP.

Thursday, January 8, 2015

Pullback Over

Well that was fast.  As fast as the drop came, the rise is coming just as quickly.  Typical.  Don't hate the game.  Don't hate the player.  Adapt to it.  The market is changing, but it still has many of its characteristics from 2013 and 2014.  As long as hedge funds act like herd animals, you will get these kind of moves.

If there is one letter of the alphabet that is most fitting for this market, it is V.  Play the V game.  When we are on the up side of the V, get long.  When we are on the downside of the V, stay in cash or get short.   Sure, you will be wrong at the inflection point, and that is where the move is most violent, but you make up for it by catching the V bounce that goes on for several days.

I don't see serious resistance till you get to ES 2043-2048 area, so about 7 to 12 points away from current levels.  I will probably look to buy Treasuries on the dip today if we get to that ES 2048 area.

Wednesday, January 7, 2015

Length of Pullback is Everything

Is this a 5 trading day pullback, or a more protracted 12-14 day pullback?   With the proliferation of V bottoms since 2009, these distinctions make a big difference.  If its a 5 day pullback, you have to buy now because this is day 5 of the pullback, and we could blast off in typical V fashion.  But if its a longer pullback, something we saw in October 2014, or June 2013, then you have much lower to go.  It is this uncertainty that makes it hard to predict the future.  If I had a crystal ball, knowing the time length of the pullback is more important than the magnitude.

I am leaning towards the longer pullback back in this case because we just had a short pullback in December with much more fear than this one, and the magnitude of the drops are not too different.  There seems to be a complacency about this pullback that I didn't see in December when there were worries about a Russia financial crisis due to falling oil.  Also, you had a huge amount of money being put to work by the investment community into SPY after we bottomed in December, with the equity fund flows enormous by historical standards.

Also, you cannot ignore the chicken little effect when the scarecrows get loud ahead of Greek elections in a couple of weeks with fear of Grexit.  And I don't believe oil will bounce much which will keep the energy bulls at bay.

I have changed my tune (maybe I am the contrarian signal that the bond rally is over!), I am now looking to buy bonds on the dip, instead of stocks, at least for the next 2 weeks.  Levels I am looking for are 2.03% on the 10 year for a dip buy.  I believe that bond dip opportunity presents itself tomorrow, with the usual weakness due to bond investor nervousness ahead of  nonfarm payroll numbers on Friday.   And if the equity correction lasts for 12-14 days, then 10 year yields should get to around 1.8%, or perhaps even lower.

Today seems like a counter trend day with the bounce in equities, the selloff in bonds, and bounce in oil off the lows, however meager it is.  I expect the equities to continue higher above the gap up levels at ES 2010 as we maintain the bid ahead of FOMC minutes today, as the Pavlovian response is to buy equities ahead of anything Fed related.  It worked like a charm in December, and many times before, too numerous to count.

Tuesday, January 6, 2015

Volatility at the Top

My previous proclamations of a blowoff top will probably not happen.  The ingredients for a blowoff top are all there, except the desire of the public to go overboard in love for equities.  Instead, there is a tepid like for equities, and I don't see investors giving any more love.

The ingredients are:
1) BOJ going full throttle QE with foreign asset purchases thrown in igniting yen weakness, which all the funds love.
2) You had China with a rate cut, igniting their market like a bottle rocket.
3) Draghi with incessant hints of QE, even as recently as this past Friday.
4) Consistently strong nonfarm payrolls numbers throughout most of 2014.
5) A 5% print on US GDP with rates staying low despite the Fed threat of rate hikes in 2015.

Yet, there is quite a lot of volatility right as we are trading near all time highs.  That has not happened in this bull market.  It is a game changer.  The first hints were on December 19, when I opined about high VIX despite the rally.  What is troubling about the bull side is that the last two big drops, in December, and in the last few days, came on no news with no warning.  Price action screams saturation to me.  The S&P is dropping 20 handles intraday way too easily.  The investment community is saturated with US equities.  Those that want to be long are for all intents and purposes, long.  It feels like January 2000.  It feels a bit like July 2007.   There may still be a few on the sidelines waiting for that 10% correction to get long, but they've been waiting for years and are irrelevant.

Lots of volatility as the market trades sideways near all time highs is a big flashing red light that a long term top is being put in place.

So the easy trade of shorting the blow off top in the S&P by going long Treasuries is out of the playbook for now.  Treasuries have caught the scent of deflation and the bid there is relentless.  Long term, over the next 2 to 3 years, bonds will be the place to be.  I was hoping for a blow off S&P top to provide an exquisite dip buying opportunity in Treasuries but that is likely off the table.

As for today, we should have an inside day, trading between ES 2024 and 2009.  I will be looking to buy the dip today again, hoping to sell into any bounce on Wednesday.  No more big time targets on the long side.  This could be just one of those 5 day pullbacks, but the way we went down the last few days, and the probable fear ahead of Greek elections on Jan 25 means that I put higher odds on this selloff extending for at least 13 days into January 16, which is opex day.  If that is the case, then we should have much more ground to cover lower, with the December lows of SPX 1972 being an obvious target.

Monday, January 5, 2015


Thought 2040 on SPX would hold in the first test, and it collapsed with ease.  There is no news causing this, which makes it more likely to stick.  The next support level is near the big gap, from the Fed day that ramped up the market.  That level is SPX 2016.  Looks like we will be going there either by end of day or by Tuesday.

Crude oil is really weak again today and that isn't helping investor sentiment, and Europe has fallen off a cliff.  Will have to widen my entry points in this type of market, and expect more extreme moves out of the blue.  This market is:  just vicious.

Shanghai on Steroids

The strength in the Chinese stock market has totally surprised me.  I didn't expect that the ticking time bomb would suddenly be the strongest market in the world.  And the A-shares at that, not even the H-shares can keep up.  Shanghai Composite hit a 5 year high today, up 3.5% today at 3350.  Chinese stocks were hated, I admit to being one of the haters, but the relative weakness was so pervasive that I thought it would eventually lead to a China crash.  It happened the other way, into an upside crash.

The PBOC starting to lower interest rates, and overflowing yuan liquidity, the money had to go somewhere, and it has started to flow out of real estate into stocks.  China has a larger money supply than the US.  They have printed way too much money for their expansion, and it can really push up an asset that suddenly finds demand.  Local Chinese investors are now back into the stock market game, and this is probably the last move higher they will see for a while.  But I am not going to short it, just watching it for now.  There will be opportunity somewhere over the next few months, markets are really starting to move more aggressively than we've seen for quite some time.  I favor more upside in risk assets in the 1st quarter, and S&P at 2040 is an enticing entry point for another grind higher.

Looking to buy dips today, the pullback is close to an end.

Friday, January 2, 2015

Throw out the 2013-2014 Playbook

The 2013-2014 playbook can be thrown in the trash can right now.  This is a new market.  We are seeing another day of bad price action on no news.  VIX is trading at 19 on a Friday despite the market being down just 0.5%.  This is no 2013 or 2014 market, where all V bottoms presented a pullback-free, smooth ride higher for at least a month to new all time highs.  We just made a monster V bottom 2 weeks ago and the bears are already chomping away at the rally, and taking out big chunks in just a couple of days.

Normally, you have strong seasonality as the new month begins but this market seems a bit saturated to me.  The mantra of equities as being the best investment, especially US equities is now taken as fact.  The valuations are stretched.  The price action is getting more bearish, but not so bearish where you can feel comfortable shorting.  This market still favors the bulls, but it is not so lopsided anymore.  The bears are winning more than before.  Instead of batting .180, they are now batting .240.  Still bad, but not a complete joke.  This market is clearly transitioning from the bull thrust phase over the past 2 years into the choppier, and more volatile topping out phase.

The market always does a great job of behaving one way until most traders get used to that pattern, and behavior, and then suddenly behaving a different way to catch traders off guard as the fundamentals change.

You cannot play this market like 2013 or 2014.  You have to adopt a different strategy to successfully trade the new market.  I already got bitten by trying to buy this dip today and it would have likely worked were we in a 2013 or 2014 market, but we're not.  2015 is a different beast.  I will have to do some deep thinking to come up with a good strategy to trade this new thing.  It will catch a lot of the users of the old playbook off guard.  I think you will see more 2-3 day pullbacks on no news.  Need to stay on your toes in 2015.  There won't be many days to relax like in the past 2 years.