Intraday Look and Analysis: Trying to Climb the Wall of Worry

After last week’s sharp rally, the indices are only off a few points from recent highs. And yet, skepticism abounds of the sustainability of any breakout. It appears as though each downtick is met with calls for a bull trap. Keep in mind, we are only one week removed from the fear and seemingly on-the-cusp-of-a-crash state the market was in with the Fiscal Cliff drama when all of the smart traders were in full cash or leaning heavily short. So, it seems a little absurd that only a few days later there are calls for a blow-off, euphoric market top similar to October 2007 or even March 2000.

Regardless of sentiment analysis, looking at the 30-minute SPY chart below we can see the post-New Year’s gap from last week has held true thus far. Note the market could fall a bit further from here and still avoid gap-fill territory. Volume has fallen off, and bears have yet to asset themselves with any sort of conviction yet. It is the bulls’ market to lose from here on out.

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