Testing the Doji Stars

So, this is the month that the FED has come to the market’s rescue–and that the economy is proving it is in a recovery. Remember, this is “Bizzaro Market”. The economy is bouncing for the holiday season. It is only seasonal.

The stock market has had exactly 2 good up days this month. The first was when you were supposed to “sell the fact” of QEII on 11/4. That just caught almost everyone leaning the wrong way–near term. Then another good day last Thursday on 11/18, the day before option expiration.

Both of those gains–in their entirety–have been given completely back and we are now in the process of testing those multi-Doji Stars that most thought would mark the top. They extend from around SPX 1170 to 1190. They are also a very important area of support.

Sure, you can keep your eye on the momo favorites, but you’d be missing what is really been going on in the overall market. It has been a double-top distribution for equities, plain and simple. The late money is almost officially “bagged” for now, except in certain select names. In commodities it has been a parabolic blow-off top and reversal. Most commodities have moved significantly away from their peaks to signify formidable intermedite term tops.

These are technical facts that will be difficult to dismiss, even in our current warped market structure.

The cycle that began in the summer, ended on November 4. We are in the process of mirroring the summer trading range except about 100 SPX points higher. Better get used to it or you’ll feel a new noose around your neck.

The one good thing I can immediately think of is how well The PPT works in a trading range… Happy Thanksgiving!