Someone's going to get hurt

The market is so far acting as I expected it to this week just chopping around. Economic data for the most part continues to be better than expected pointing to economic recovery and retail traders for the most part continue to dismiss market action as manipulation and since April continue to call this a bullshit rally. There's no such a thing in my book. By shorting the rally did that mean that these people lost bullshit money? You tell me. A rally is a rally and whether it lasts or not, it's very real.

You want to argue with the market go right ahead and good luck to you. Bears argued the market was overpriced in 1996 when the P/E hit 20 and the Dow was at 6500. It went to hit close to 12000 4 years later. I'm sure they said the same thing - “bullshit rally!". How many of those bears do you think were left standing after 4 years? Here's a hint, it rhymes with "euro". That's why there's no such a thing as a bullshit rally or decline for the matter.
I'm amazed and also irritated by so many lemmings out there who continue to think that there is some grand conspiracy rigging the markets. I remember when after the dot com bubble burst any downdrafts would often be dismissed by the same group of people as "the big boys shaking the tree to scoop up cheap shares". I'll say this again, the sooner you stop blaming a higher power for rigging the market the better off you will be. And for any of the clowns who think the system is rigged, then why the fuck don't they just go long and make, according to this thesis, free money? I suppose it would be an insult to their intelligence to do so. I suppose they want to make money only if it’s “justified” according to their views. Give me a break. It's mind boggling how naive, biased and ridged people are.

Well, it's clear by the action that we are setting up for a big move one way or the other. Bears must be very concerned and I’m sure frustrated as hell that the poor bond auction this afternoon didn’t crack the market. The longer we keep chopping like this heading into Friday, the bigger the potential for a final blow off move to the upside before profit taking finally takes hold.

The latest Investor's Intelligence sentiment numbers came out today. With the market surging making a new YTD high since last week, you would expect to see a surge in bullishness from last week's numbers which showed a 1:1 ratio of bulls vs. bears....well, you would be mistaken. 42% are bulls and 31% are bears. As you can see, it seems that people can only turn bullish by being forcefully dragged kicking and screaming, yet when the market has a 5% dip bearish sentiment spikes sharply. That is wall of worry behavior folks and I'll say this again, until most market participants drop their guard low enough thinking the coast is clear and it's onwards and upwards, don't expect any downside to be greater than 10%.

Bottom line: Market action suggests a big move is comming one way or the other and so someone's going to get hurt. It could go either way but the bears so far have shown no game whatsoever. They had a catalyst to bring down the market today but they got stuffed. What this tells me is that the path of least resistance is still higher making the likelyhood of an upside breakout greater than a downside one (but not by a large margin). In my opinion any upside breakout will likely lead to an exhaustion point rather than a continuation of the rally to much higher levels.