Market Update and Determination

I cannot blame anyone who sees this as a market short opportunity, I agree the probabilities are on the side of a move lower, however I cannot in good conscience, despite a move in the averages from +0.86% to the R2K's +1.73% today.

However lets not forget the IWM was down -2.42% yesterday. What did I warn of at this stage in the game? Extreme volatility, larger ATR's (Average True Range ) and volatility not just in the bigger moves way, but also in the unprediactability factor in which we can see a big move up then a big move down, maybe another big move down followed by a big move up. I do think it's likely we close over SPX $1600.

Here's my rationale: Ever since this move to the upside got started ther was one thing I wanted from it, that was to short in to demand and higher prices, that is the same reason Wall Street set up this move, but even with a new SPX high, they have not been able to do what these moves are designed to do (and this is not Jonny-come-lately speaking-I told you the EXACT same thing before the move up even started). I told you the purpose of this move is just like a countertrend rally, it is to be strong, impressive, to change sentiment from understandably bearish to bullish, that is what is needed to get retail to buy so institutional money and us as well, can sell short, initiate new shorts or fill out partial positions. The riding the move higher or lower here and there is just extra money off good signals, but if I had to act in accordance with my main mission statement, it would be to wait for the market to put in a strong enough performance that retail turns bullish and starts buying on increasing volume, then I'd be looking for my opportunities to sell short in to that and all of this for the primary move expected DOWN!

Today there are timeframes that just are not negative enough for me to consider this a "HIGH PROBABILITY TRADE". I think probabilities are the market goes down and I don't know what could happen that makes this not a high probability trade in my view, perhaps the market runs +3% in an extreme move to change sentiment? Perhaps the move lasts today and then gaps against us in the a.m, I don't know, I just know that as of now, I can't condone it.

As for some "general" indications and I will be looking much closer...

 The manipulation short term (intraday) of the SPY was high on the open, it fell off creating an area that looked perfect for shorts as a counter trend play, "Fading today's move", but now those levers are being pulled again. I will find out which ones, but perhaps this is a bear trap as bears see the high percentage gain and momentum slow and enter short to fade the move, then the levers send the market higher, the short squeeze sends it even higher and we have a +3% day up, that would go a long way in convincing traders to get back in on the bullish side and that is as I have always said, the point of this exercise.

You will know when they have succeeded when you yourself emotionally are full of doubt and emotions almost or do get the better of your decision making process above objective data, then you know they have achieved what they set out to do.

Again, I don't know how this plays out, I just see a short trade that doesn't look right and I have been looking for hours, how long did it take me to close out all Puts yesterday (Index) and grab 2 calls (IWM and GOOG)? It was seconds because all of the signals were there.

As for CONTEXT, even last night I tried to illustrate what Leading Indicators need to look like to convince me we are there, at the "Back up & Load up the truck with shorts". This CONTEXT chart shows that they are moving in that direction, so as far as what I expected before the move began, it's happening.

However it is one thing to hear about "What to expect" a couple of weeks ago and before something really emotionally moving happens, even though you were told to expect that and then to actually live through it-that's the hard part, to know what to expect and then to be able to sit through it and stick to your plan.

I'm going to do some more investigating and see if there are opportunities anywhere, but I'd much rather not have a trade for tomorrow than to take one that I'm not convinced of.

*****I hope you understand and even more, I hope you have the ability to know what to expect, know how to use that in your favor and know that this is all about emotions, so most of all, TO SEE WHAT IS HAPPENING, TO RECOGNIZE IT AS WHAT TO EXPECT AND TO KEEP YOUR EMOTIONS OUT OF THE DECISION MAKING PROCESS, THIS IS WHAT SEPARATES THE PROS FROM THE SHEEP.