Contrarian View

Been browsing through the blogsphere this morning and it seems almost everyone is going short here and closing longs. I am not so sure that is the right move quite yet and I think a short below 1040SPX would be a lot wiser. I am currently hedged (almost 100%) against my longs but I am not ready to close out quite yet.

We are quite overbought here on the short term and we need to give the market time to absorb those "sellers" hence my play to get back towards the SPX1050-1055 levels as the first stop. Depending on how we get there it will tell us a lot more on whats coming but I do believe that we will see 1085 at the minimum before seeing below 1040.

Also take a close look at our updated channels. MACD is showing us more upside after getting back to zero. Channel wise we are currently in the middle so its a bit more likely to pause slightly before re-attempting to upper ranges. Just imagine the next low volume rally based on the many new shorts that are entering the market - we have seen yesterday what happens when people are forced to cover.

10:27AM: it should turn lower right here or very high chance of a new HOD by noon.