11-15-2009

The pendulum of the market has reached its potential inflexion point yet again, exactly at the mark of two weeks cycle.

We have seen the market maintainning a steady high/higher upward channel and it seems that 11300 is the peak for the DOW (1100 for SP500).  the indexes reached their highs last Wednesday and immediately sell off on thursday (a day when the economic news was "good" mind you).  Friday saw market reclaimed some lost ground, but fail short of breaking the peak.

With jitters about carry trade, failing dollar, recovery strength etc, it is hard to believe the market would race higher any time soon.  To use a cliche, it lacks a catalyst.
 
From my vintage point, I would say the market will start/stall for the first half of the week and trend down the second half. 

The small cap is an obviously laggards for the last few weeks,  so are semiconductor, financials.   So, unless they can gain some strength, I would think we cannot go any higher.

Here is what we need to look for:

Be patient and calm the first couple of days, and if our feeling of the market was right, we could be on the short side of this market by the second half of the coming week.