The Roubini rally?

The boring, choppy action I called for today occured as expected....until about 2pm when suddenly the market got a dose of viagra. Apperently, it was sparked by a comment made by Roubini who claimed the reccession would be over by the end of the year which I suppose people took as a form of capituation from this perma bear. Obviously there is no way to anticipate these sorts of catalysts.

Today's action really stuck it hard to the bears. Capitulation yet again was evident by how the market spiked after it took out 935. That one must of really put the dagger into the heart of all those dogmatic bears out there. In 2 days, the've seen 3 weeks worth of gains get wiped out and then some.

Here's a comment from the SPY message board on yahoo

Do you all think the HYPE machine is finally in full gear? Is this rally going to spx 1000 + ? I was wiped out with my puts ....

When enough bears believe that SPX 1000 is inevidable that's when the bottom of this market may fall out....but then again, like I said yestersday, it seems like anytime we get capituation like the above comment all it takes is a marginal decline to give these lemmings back their convictions....untill they get slapped around again. Eventually, these weak bears will give up permanently and that's when the market will have potential to see serious downside.

The ST outlook is still the same....it just made things even more overbought in the ST. The market will have a very tough time advancing signficiantly from here in the ST. A downside correction or at the very least a tight sideways chop is in store. If we get the latter with a surge in bullishness and collapse in the VIX then look out below.

I'm also prepared for the possibility of a retest of the highs or even break of them after a small dip next week. I seriously doubt the market would have any gas to make it to 1000 if it breaks 950 at this point. It would likely be a serious headfake.

I'm not sure about tommorow....I'm thinking mild pullback or sideways chop again...I'll be playing this by ear and looking to take advantage of cheap option opportunities.

Bottom line: I'm keeping an open mind to possibilities but odds suggest that in due time this rally will fail back to about 915 at the very least even if it means markets go sideways or higher first.
The market is NOT in the position to make a run for 1000 at this point in time.....mabey later on in the year but not now....in my opinion of course.