Quick, but IMPORTANT Market Update

This is a gut feeling based on very imperfect information.

As you know from the IWM put and VXX call, I think we get a market move to the downside, I'm not convinced this is anything more than a move that is essentially chop.

I'm not seeing the large positive divergences in gold that I'd expect to see if the market were about to break down hard, in fact according to our initial expectations of the market coming out of the accumulation range, this wouldn't even be the end of the upside move as it was expected to be larger than the range.

So I'm thinking we get some chop starting with a downside move. Although they tried today to get the SPY Arb to work (see VXX), they couldn't, however I think the Yen pulls back, it may take a day or so to complete that move, but that would allow the currency crosses to come back to support the market.

You have to keep in mind what the original purpose of the accumulation range was, to send the market higher, to sell accumulated shares at higher prices and the grand-daddy of prizes, to short that strength. 

We did get a fundamental surprise as the week started with the Syrian diplomatic measures, not the market rallied right as that came out, when it should have pulled back to the bottom of the range Monday, but this would just have been to accumulate and create a stronger base for the market to rally from so it doesn't rally matter, the market moves up and that was the end result we expected from the range.

It's difficult to say if the market can put in any significant gains from here, there are a few stocks I see that need a little more on the upside like BIDU, PCLN (these are close to resistance areas and those are magnets, especially for those who want to sell short in size, they need those breakouts.

The general feeling I get is that the market (from initial expectations) should make a stronger move to the upside, but since the events (fundamentals) on the ground have changed and could change again, there's always a "Sell the news" on any Syrian resolution.

As I said earlier today, in my view, the market NEEDS more of a reversal process just so longs can be sold and shorts entered, it wouldn't be a big deal if the accumulation range hadn't been as effective as it was, but this in no way looks like a new bull market or resumption of such.

I think we get a lot more chop than people might expect, so that means more hit and run shorter term trades while setting up for the big trending shorts or core positions.

I think by the time the market is really serious about a major break, gold will be clearly under heavy accumulation.

This is a REALLY difficult market because we have 3 fundamental events, Syria, the Taper of QE and the replacement or not of Bernie which depends on Syria. In addition, the hedge fund herd will be breaking up so this looks to be one of the most challenging markets, however if we play hit and run on positions and ONLY take the best looking positions, don't get greedy that you'll miss a move, don't get scared that a move looks too strong, I think we'll do better than fine, we may be some of the only ones left standing.