Bears could get a little break but they aren't out of the woods just yet.

Today's GDP report turned out to be anti-climatic given yesterday's breakout.

The psychology out there is fascinating. Despite many bears being blown out of the water, there's still plenty of top picking out there in addition to bears who are trapped at lower levels. They seem to be in a state of paralysis and denial. The more the market moves against them, the louder their complaints about manipulation while other bears seem to be quite calm despite being underwater given their belief that the market surely will drop soon as they expect. I have found that when I have a position, especially a losing position, and I'm not at least a little bit nervous it's a bad sign. If you ever find yourself underwater with a position and you are very calm about it that's a VERY bad sign. Chances are you made the wrong trade.

There's a gap to fill at about SPX 975 which I think will likely get filled next week. I will be watching to see if burned shorts will be using this dip to cover or just stick with their positions. Whatever they decide to do will likely be the wrong move.

I am very suspicious about the way the market has made this latest high. Notice how
The high is right at SPX 1000 (I know, it's 996.68 but close enough). That's quite a predictable level don't you think? At significant tops and bottoms it's rare to such nice neat numbers hold up ...it's needs to feel sloppy/desperate. Therefore, to me this looks more like a possible ST top similar to 875 back in April and 950 in June which were predictable resistance levels.

When the market is persistently weak or strong it becomes very tempting for novice traders to bet the other way anticipating a turnaround. This is the number one reason traders go bust. I mentioned back in April and May many times about the troika of death FAZ/SRS/SKF and how it was bankrupting traders who kept trying to pick the bottom. That trio of death is still making 52 week lows. The same sort of thing happened after the tech bubble burst. The lemmings would double, triple and quadruple down on their favorite tech stocks which were such huge winners in the past. I see today's rookies doing the same with bear ETFs. No wonder UBS banned leveraged ETF's recently. They said it had to do with their emphasis on LT investing. Bullshit. They did it because their clients were getting murdered by them which led them to probably hate investing and/or their advisors which obviously are no good for sales. If these clients were actually making money on these ETFs there is no chance in hell UBS would have banned them...none whatsoever. In the investment advisory business it’s all about sales. Period. Trust me, I've been there.

So what's next? I suspect that gap at 975 gets filled before any significant upside headway can possibly occur which if it does probably won't last long. The market is likely going to be in consolidation mode for the next several weeks because it is quite overbought.

The market is now up for 5 straight months and 50% up from the low. I'm wondering at what point many of the die hard bears I see out there are going to capitulate and at the very least admit to the possibility that this is cyclical bull market like the 2003-2007 bull. I suppose never or when they go broke.