Bear massacre immanent?

The market really stuck it to the bears today. It may not have seemed that way given the modest gains but from the blogs and message boards you can tell that the bears were pressing hard today hoping for the follow though from yesterday's reversal and they got badly whipsawed. It was in fact a bear trap and a rather painful one because the bear's weapon of choice FAZ/SRS underpreformed the market big time. SRS took a 10% drop in the last 10 minutes of the day alone! Ouch! Those 2 houses of pain now stand just marginally above their all time lows which means just about anyone who owns those pieces of turd are bagholders.

Stress test results are going to be relayed to the banks tommorow privately by the regulators and the test methodology will be revealed in the afternoon and so investors will be able to draw their own conclusions as to who may or may not be "in trouble". Offical results will be made public on May 4th. This is comming at a time when the market appears to be at an inflection point as per the chart.


A big break out is comming one way or the other. I think the bulls will win. The dumb money indicator continues to make new lows while the smart money is flirting with its highs and again I see no let up from the SRS/FAZ bottom fishing. It's getting to the point where bears are becoming delusional....I'm serious. How much money must they lose before they stop fishing? No matter how many times they get stopped out, they keep trying....with no fear. Look at stocktwits today. The FAZ to FAS ratio was about 3:1! This is madness I tell you! I think this serial bottom fishing is also a case of a lot of egos being bruised here. They want to be proven right about their bearish posture that the've bought into hook line and sinker from Roubini, Whitney, Schiff and all the other celebrity bears.

I will be looking to take advantage of what could be a bear masacre tommorow if I see a good set up. The potential for both bulls and bears getting whipsawed here so the best way to pay these senarios is with a "all or nothing" call option spec. I am eyeing the XLF June 8 and 9 calls.