Anything is possible in this environment and we have to be prepared and ready for the unexpected.

                              Sideways chop continues. Stay patient and take care of job #1 capital preservation.

It's a volatile world !

We are at the moment in no man's land, after the last hour sell off, and we can go ether way based upon the next headline. We need to get a tip from Mr. Market in which direction to go before we can get involved.

Stay alert and patient.

A trader's question:
 “How far can a market rally built on rumors, technicals, short-covering and quarter-end window dressing take us?”
Well, we are about to find out.

Short term swing trade.

I mentioned the possibility of a short term, swing higher, window dressing trade at the end of the month on last Thursday's blog. Today's price action confirmed that scenario and the probability that we will see a rally back to the 50 dma area this week increased significantly.
                               

                               

    

The information contained herein is for educational purposes only and is not, and should not be construed as an offer to hold, sell or an offer to buy any securities.

                           

Looking at the week ahead.

Clues are just the clues not the guaranties, they are just the indication to go one way or the other. 1120 SP area is the area that is "the line in the sand" for bulls. May be the most important area for months to come. Choppy 2011 continues and pattern failures are common in this kind of an environment. Capital preservation is the most important at this juncture.

                                 monthly view

Reflection.

Don Quixote, despite being delusional, saw in people more than they ever possessed. He meets Aldonnza, a farm girl (a woman of the “oldest profession”) and, either blinded by love or insanity (probably both), he sees only a lady in her, and starts treating her like one, calling her by another name, Ducinea. She knows that she doesn’t deserve this treatment, but she starts believing him, and this belief transforms her into a different person – she aspires to be the person Don Quixote sees in her. My grandmother was like Don Quixote: she always saw a much greater person in me, though I rarely deserved it (she really had a rich imagination); and I tried to rise to become what she saw. Now that I’m a father of two wonderful men, I do the same for them. The little things we say to our kids and others really do matter!