Wrong as far as last week’s projection. The market continued to advance albeit at a slower pace and continues to widen the bearish flag. As a day trader, I trade what I see and not what I think. Fairly balanced number of day trades to the downside as well as the upside and profitable..
Stress test results release has been postponed from May 4th to May 7th after the close. Disputes with various banks seem to have arisen. The worst case scenario for stress test have already been met by actual conditions as reported by both the Fed and the US government. We have/are witnessing a rally of historical proportions, of that there can be no doubt.
The market has yet to make its case that this is the beginning of a new bull market. We have lows beneath lows currently which is the definition of trend from the intermediate to long term. This remains a bear market rally. February highs have not been surpassed. After that (should it happen) there are the January and election highs to be overcome. Abby Cohen of Gollum Sucks (GS) has posted a projected high for this rally of S&P 1050.
If the quant studies and Zero Hedge are to be believed, a preponderance of this rally has been fund activity, mainly GS and MS. Add to that massive short covering and it is apparent that sideline money is not largely involved in this rally. Add to that the April 15th effect of money flows into IRA, Keogh accounts (never committed to the short side) and this week could well see the start of a tradable move to the downside. Downside projection is between 5-8% which would put the S&P between 805 and 835.
