July 22, 2009

The market continues to climb defying the laws of gravity. It is in the most overbought condition in 2 years. Our shorts sales were stopped out at 912. We are now above 956 where we sold. While it is possible for the market to do an ABC (up - down -up) pattern to over 1000 on the S & P 500, I currently favor the double top scenario keeping under resistance at 960. Short term should correct by Friday this week and next week at which time an assessment can be made as to the continuing gravitation defiance.

Current trade is back on the short side, also selling August and Sept SPY call spreads.

Either way, by this fall/next spring, the market will be at a much lower level.