As predictable as the establishment of this new trading range is (SPX 1040-1100), the move from peak to trough–and back up again–is sometimes astounding.

After plunging to SPX 1045, markets rallied back sharply at the close of last week. There have been plenty of conspiracy theories about The PPT (no, not ours. the folks who work on Maiden Lane) or some other government functionary buying futures and stuff. But that was not the case. There are legitimate buyers at obvious levels of support. There are also plenty of traders willing to take a risk at those levels of support. Of course, should support break on volume, then everything stops and reverses.

Dropping a quick 100 points in the SPX has served to change the tone of market participants, from wildly bullish to scared shitless and hoping for a break. Well, they’ve gotten one today. I’m not sure exactly why it has come today, but my guess is that it is a delayed reaction. This rally should have happened yesterday (Monday), but perhaps there were a few Super Bowl hung-over money manangers who missed work.

Banks are bouncing around, but not doing shit. It is the dollar plays that are going apeshit. While the metals themselves are bouncing, they remain in a downtrend. It is the related stocks that are seeing monster short covering action. Maybe someone “senses” that the dollar has gone as far as it will for now and is about to be “engineered” lower. That would certainly put a wicked bid under the market and the SPX 1040 bottom. Other than that, I couldn’t tell you why today’s rally is so dynamic to the upside. Maybe the media will invent something for our enlightenment.

Our positions are holding their own and there will be some new ones shortly.

ADDENDUM: Apparently, it is all about the Greece bailout. Can it be? Aren’t GOOG & APPL together bigger than the GDP of Greece. I kid…But no, really. Is that the excuse for this monster advance?

We are now half-way from the bottom of our range to the top. This is the make or break time. I expect a little retracment and traders to take some quickly-earned profits. Then a day of pause. Then another spike towards the SPX 1100 target…

Just a quick position update.

Reco’d Century Aluminum Company [[CENX]] long at 12.50. Just doubled down near 10.50 and own at 11.50. Statying with it with a 9.50 stop and a 13.50 target.

Reco’d Goldman Sachs Group, Inc. [[GS]] long at 149. Rose to 159 and rode it back down to 150. Staying with it with a 147 stop.

Reco’d Kulicke and Soffa Industries Inc. [[KLIC]] below 5. Trading at 5.60. Buy on a test of 5.25-5.30. Stop 4.50, target 7.50.

Reco’d short eBay Inc. [[EBAY]] at 24. Maintaining position with a 26 stop and a 19 target.

Expect today to continue the tug of war as markets fight to define the lower parameters of its new trading range.  But a tradable bounce may develop before day’s end.

I hope you are enjoying and maybe getting some value out of the streaming video market updates. Have a safe and happy weekend and don’t slip on any bannana’s…

I’ll be doing a video update at 2:00pm EST. You can see it on the IBC homepage, my blogpage, createcapital.com or on http://www.ustream.tv/channel/scott-bleier-biz-radio-simulcast-live

Here I am, a newcomer just trying to keep up with the youngsters…

I say that I’m just looking to hit singles and doubles. Then I hit a home run. By accident.

Kulicke and Soffa Industries Inc. [[KLIC]] just reported a blowout number because they–like other semi-equipment stocks–are leveraged to any economic recovery.

Don’t get used to this kind of winship from me. It was an accident.

Please watch the simulcast of my radio show, if you can. I will actually answer a few questions, occasionally…

Holy crap! The dollar is getting spanked and commodities—primarily oil (up 3% today) are skyrocketing in a dynamic bounceback from the last two weeks of hammering (profit-taking).

There is no real news that is fueling the markets. This is simply the first bounce from the first correction that broke the latest breakout. The December breakout was broken and technically failed. That was the first time that occurred since July. So traders and investors began to “gird their loins” for the pullback to SPX 1040 then 1000 then 960. But it doesn’t work that way, son.

As we marginally broke the key 1080 area on the SPX, we figured on a marginal breakdown and then a recovery to the upper portion of our trading range, at DOW 10500, SPX 1120 and Nasdaq COMP 2225. That is why we reco’d a financial Goldman Sachs Group, Inc. [[GS]] , a material Century Aluminum Company [[CENX]]  and a semi-capital equipment stock Kulicke and Soffa Industries Inc. [[KLIC]] . And we remain short eBay Inc. [[EBAY]] .

We are profitable on all four positions, an average of 4%. Seems like chump change, but not bad for a couple of days. Quite franky, I’m not looking to hit home runs. Just single and doubles. All day long. Don’t forget to keep your stops at the appointed levels.

You should be looking at General Electric Company [[GE]] of all things. The low 17’s is a monster breakout for the stock.

I forget the statistic; 14 of the last 15 Monday’s have been up. Or something like that. After the markdown of last week, the new month starts fresh with nice new money.

All manner of commodities–especially gold–are moving up quickly to test their near-term downtrend lines. The dollar (DXY) challenged 80 but has been turned away by stiff resistance. The dollar will now pull back, giving the all clear signal to buy everything else–at least up to major resistance or a testing of the near-term downtrend lines.

Volume is once again punk but breadth is half-way decent. Everything related to energy, commodities and industrials are bouncing sharply. Tech (sans AMZN) is also bouncing nicely today, though nothing to write home about.

Today’s rally appears to be mostly the beginning-of-the-month allocators plus the no-end-of-the-world shorts covering. It is not generally believed–at least by the one-way market crowd.

The consistant and relentless up market of the past ten months looks like history. Therefore we will probably rally to test the highs and maybe make a new marginal one before going below 10k. And yes, we should break 10k as we estabish a new trading range in order to digest the crash and snapback that has been our history over the past 18 months.

Take the time we crashed and recovered and divide it by 2 and you’ll get the time for the consolidation phase. This “rule” didn’t work in 2003-2004 as the consolidation lasted almost 2 years–almost exactly as long as the crash and recovery, until the 2006 breakout to new highs. If that happens now, then expect a boring trading range between 9500-10500 until 2012. Not a pleasant thought to you mo-mo’s.

Keep your eyes on semi-capital equipment. I like KLIC here below $5. Feel free to buy anywhere below 5 with a 4 stop and an 8 target.