Thursday, September 22, 2011

Fed gave the market freedom

Now the market will do what it needs to do - stop out late longs, retest the 1100 bottom, and start year-end rally from slightly lower level. We have 2 week vacuum between today and start of Q3 earnings reports. So the market will do its work at this time. Back and forth action will mostly be directed downward, and SPX 1100 will fail but so slightly in my opinion. There are still respectable earnings coming out of many companies, cash on balance sheets is high, dividends are enticing, and seasonal strength is just about to start. All of that will keep the market from collapsing during 1100 retest. I expect 1080 - 1090 to be the bottom for the year, to be made in the next two weeks. Follow the progress of this trade here:

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