The Goldman buy of thousands of SP futures yesterday sure was a great speculation, right? All the levitation of stocks and the refusal of the market to pull back is now justified, in hindsight.

Since testing the SPX 1040 area, our upside target has been 1120, and after hemming and hawing in that area, we have blasted right through it and are now on the verge of challenging the January highs. It really doesn’t matter what the employment number was. The VIX staying below 20 told the story. Now it is 17.50, a post-crash low.

This time, when it was obvious, it was obvious for a change. It just shows that we must be ready to adapt to the changing market conditions at a moments notice.

We lightened up yesteday by selling our most economically sensitive stocks and they continue to rise today. Oh well. Ringing the bell is ok with me and they remain a great sell as they approach their pre-determined targets. 

After this little bust-out in the major averages, there should be a test of the highs. But I want you to be ready for anything–especially a typical trading range reversal. I anticipate another pullback in which to get long some laggard stocks but it may take until next week to get it. Then, if we simply pause, we may have to jump in for a quick trade. But as of now, you should lighten up while the lightening up is good and easy…

If you want to see the chart setup for this move, please look a few posts back to “this is what a contracting triangle looks like”  who says technical analysis is for shitheads?

Tomorrow is the employment number which will stink up the joint. But the market is hovering near the top of the range and not gaining any downside traction. Therefore the bad number is built-in and there can only be a positive surprise. So nobody expects a sell off. Any upside would be the only surprise, but good news for the economoy is bad news for the market.

We are hovering near our target of SPX 1120 and I want to get OUT OF THE WAY of the number.

We are lightening up.

SELL:
Century Aluminum Company [[cenx]] near 14.00 over 21% gain.
Goldman Sachs Group, Inc. [[gs]] near 162.50 a 9% gain.
Oceaneering International [[oii]] near 61.70 a 15% gain.

Trades to be run near 2:45pm EST…(Forget it, I’m out 1:30pm)

Stay long:
L-3 Communications Holdings, Inc. [[lll]] Hudson City Bancorp, Inc. [[hcbk]] Kulicke and Soffa Industries Inc. [[klic]] Telecom Corp of New Zealand (ADR) [[nzt]] Short eBay Inc. [[ebay]]

Goldman Sachs Group, Inc. [[gs]] is breaking out and our target is 170.
Century Aluminum Company [[cenx]] is approaching our 14.50 target. You are on your own there, big boy!
Oceaneering International [[oii]] continues to rock as is L-3 Communications Holdings, Inc. [[lll]]

More later…

Please look carefully at the chart of the DOW that I published last Saturday on my pay site. We are now, at this moment, at the upper line drawn just above 10400…

We seem to be waiting for some selling–instead we have another no-volume grind. The employment numbers will dictate the next move, but it should end up being a test of the January highs…

We continue to grind higher regardless of what you think, feel or believe. The market seeks to fuck your belief system up, and its doing just that. The Wall of Worry is vertical and growing faster and wider than the wall seperating Israel from the Palestinians. They figured out how to build a wall. So have the Chinese. What’s wrong with us?

Look, overbought markets stay overbought and today is not an exception. Knowing that there has been every opportunity to crack the market wide open–but that it didn’t happen–might very well be the excuse to be confident. But now we are magically through our SPX 1120 target and 1130 is big resistance. Somehow we should now expect a test of the January highs IF we can continue to probe the 1130 area. I don’t want to believe that could or would happen just now, but we seem to be on our way there.

Don’t chase and stay with existing positions with your finger on the trigger. All that is missing is volume, as usual.

Here’s what I’ve done since arriving here at IBC about a month ago:

• Forecast a pullback to SPX 1040 test: check
• Reco’d several stocks: check
• Every stock moved in the right direction: check
• Forecast SPX 1120 as the top of our range: check
• Forecast a “dip and rip” and fell to 1085 and now ripping higher: check

Now what? Stay tuned!