New Highs?

We are gapping up a bit from yesterday's close, right around new highs.  On a Friday, after a comeback yesterday, we are probably going to be short of fuel to propel us much higher.  There is nothing market moving as far as economic data or speeches today.  I will be looking to sell this morning looking for a morning pullback.  I am not looking for much, just looking to pick up some pocket change before the weekend. 

Momentum Rolls On

The market gave the bears a sample of some honey this morning and ripped it away.  New marginal highs look to be on the horizon as we head into earnings.  I don't think the shorts want to be short ahead of the weekend so we'll probably get the last bit of short covering tomorrow.  I think 1188 is in the cards for tomorrow which looks to be very close to the top of this move. 

That Didn't Last

Well the weakness lasted for about an hour and we have been going straight up as we've done so many times in the past.  It seems like this market is going to rollover and then we exhaust the selling and melt up again.  The pullbacks are so shallow I can't imagine the dip buyers getting much of a chance to get long here.  The momentum is ridiculously persistent, the selling is unmotivated.  We'll likely hit new highs again before the next downturn.  If Greece fears can't bring this market down, it has to be something else.  Or maybe just a sell on the news from baked in the cake strong earnings season.

More Greece Fears

This is the storyline that never goes away.  How many times will we hear about Greece debt?  Greece is ONE thing that I doubt will crash this market.  Its got to something less expected, maybe a Spain meltdown or Fed raising rates.  I think we'll bottom in the morning and go right back up to finish strong, filling the gap and going positive on the day. 

Toppy But...

We are in the process of forming the top, and this pullback will likely be bought and we'll probably test 1188 again later this week.  There is no urgency for me to trade the 1% swings.  I might miss a few little opportunities, but I want to be well positioned when the golden opportunity arrives.  I am leaning towards a gap up for tomorrow and probably reaching at least 1186.

Low Rates Forever

The back and forth action based on Fed speak has taken us nowhere.  Bernanke seems intent on building more bubbles and looks like rates will be at zero for the rest of the year.  I wonder if it will take $150 oil before Fed increases rates.  Looks like more free money.  Hard to fight that on a fundamental basis for a short.

Gap and Go

Something smells fishy today.  I think this gap down is to tempt the suckers to buy at the open.  Just seeing way too much complacency for us to keep going higher.  Nah, I am just dreaming, can't imagine this market actually gap down and not go straight up.

I am itching to get short but I want to wait for one last run higher before putting down my bets.  We are biding time before earnings start coming in next week.  Strong earnings are already baked in to current prices.  I see no positive catalyst.

Not Much Happening

There was a slight dip based on some Greece news in premarket but that's been shrugged off and we are back near 52 week highs on all the indices.  Small caps are continuing their outperformance.  The market is very complacent, but there is no real movement for me to act on.  I will not short such a dull market.

Small Cap Spurt

Small caps have been outperforming throughout this rally.  Noticed near the close on Monday that the Russell 2000 index made a burst higher which looked index/futures related.  Smells like a bit of capitulation.  There was already a wide divergence between small caps and big caps during this rally from February.  We had similar, but smaller divergences at short term tops in September, October 2009 and January 2010.  To me, it looks like we are getting very late in this rally when you get this kind of divergence.  The pieces are coming together for a significant top. 

Doing Nothing

We are getting closer to the turning point but not quite there yet.  I think we'll get another bump higher after today's Fed meeting is out of the way.  Just sitting on my hands and respecting this strong trend.

Higher Before Lower

I think we will go higher before we get that pullback.  I think 1195 is in the cards this week, but I think that level will be where there is serious supply and the market will turn back towards 1150.  My strategy is to wait for the market to drift higher and then put down my shorts.  There is no need to hurry into a short position.  The nonfarm payrolls came in just right, according to analysts.  The crowd is starting to get bullish.

Nonfarm Payrolls Out

The good news is out.  It was well expected and the number came in around consensus.  The futures have a slight knee jerk positive reaction.  It is a tricky juncture right now, the markets are overextended and the bearishness is almost nonexistent and good economic data comes in.  But a lot of people are looking for a pullback but think we will go higher after that.  Hmmm.  Something to think about.  Happy Easter.

Jobs

We are going to be getting the nonfarm payrolls tomorrow and the futures will be trading on a holiday.  Goldman already came out blasting with their payrolls estimate downgrade, which means they were short and wanted the market lower today to cover.  There are big expectations for this number, so I think it will likely disappoint. 

Out of the Blue

Well, that was a blind shot.  I don't think too many traders saw that coming, including me.  Looks like the fund managers were so eager to get in on the first chance in Q2 that they rammed this market higher than it should have gone.  I still think we will hit 1190 before 1150.  I am neutral here, but I think we'll be higher next week than current levels.  For today, the trading seems random to me, but there is strong support around 1166 and now resistance at 1170.5

Fresh Money In

It is the start of a new quarter, and the day before a holiday.  That can only mean one thing.  Buy.  Buy.  Buy.  The buyers are getting more and more impatient waiting for that pullback that never appears.  I think we can keep squeezing higher as the next few days should bring out more impatient buyers after the nonfarm payrolls and ahead of Q1 "blockbuster earnings" for everybody.  It seems insane to fight this kind of momentum so I won't.  I will likely do little today.  I think 1195, which equates to 1200 SPX will be a time to make a stand on the short side.  I hope I get that chance next week.  I will grab a swing short at those levels.