Price patterns have it. Stocks rose once again in the face of severe overbought conditions, simply further affirmation that a major counter-trend rally in unfolding. This rally must look like the real thing to draw the public back for another whooping, and this rally is doing the job of looking real.
Of course, the rally is going to have a pull-back at some point, and the retreat will be sharp enough to scare out weak longs and draw in bears before turning for the next wave higher. But apparently too many bears are still positioned for an imminent decline since this thing just keeps chugging higher. I, for one, see no competitive advantage in attempting shorts at this point. The strategy is to wait for the scare and add to longs. However, if the rally spikes all the way into the SPX 875 pivot with some ending volume or a strong SoS day, I may then open a moderate short position.
Speaking of selling-on-strength, the spyders did see $126M of it today, so perhaps the rally is losing some steam. We also get a good view of a decelerating advance on the 60-minute view:
In fact, I won't be too concerned even if we do lose the pivot since all my longs are commodity-related, and a larger drop will just make them cheaper for me to buy more.
Precious metals were a non-event today, so there is nothing to discuss without being repetitive, except to note that gold is still toying with its trend line:
Gold could be in the midst of a A-B-C correction, which projects to $850. I really, really would hate to see our little yellow friend lose the $850 mark, though.
Okay, back to my tuna and crackers. Good night...