S&P Toppy

After touching 2400 on the first day of March, we have been trending downwards.  We even have one of those rare gap downs after a pullback.  I looked at the news wires to see why, and apparently North Korea shooting 4 missiles into the ocean was the reason cited.  LOL.  The South Korean index went up anyway and they say that's the reason the S&P futures are down.  Where do they find these financial journalists?  It's a thankless task, because they can't just say: the market was overbought, the S&P looks like it has topped so it gapped down this morning.

Usually you see some chop before the drop, but with these bubble markets, who knows.  I still expect a rally attempt starting today or Tuesday, but I expect it to fail and go right back down.  The FOMC meeting, Dutch elections, and then the biggie, the French elections are lined up in the coming weeks and months, so I don't think Europeans will be too willing to get even longer ahead of those events.  So any rally attempts this week will be a good chance to short.  Preferably, I would like to short within 10 points of the all time high, so at least SPX 2390 or higher.  Also, it looks like the pre-selling ahead of nonfarm payrolls this Friday and the probably FOMC rate hike next week could present a chance to buy Treasuries above 2.50% yields.  We'll have to see how the week plays out, but that is the basic game plan.

For the next month, there should be a risk off tone set by the Europeans who will likely reduce their longs ahead of the uncertainty of the French elections.  That should spill over into the US, as the SPX is stretched on the upside at this point.