ST buying climax likely today

As you can see by the chart below, we almost most certaintly hit a ST buying climax today which means tommorow is very likely going to be a flat or down day. Any gap up open will be gift to short but I doubt that's going to happen.





After big rallies like this, it is common to see the market have a boring, choppy day the next day but with a downward bias. I expect this to be the case unless there is some significant bearish surprise in the morning news.

I pointed out just prior to this surge that bearishness was building quite rapidly and to watch out for a snapback rally. We got that big time and I believe we will need to see this bearishness fade away before any sustainable downtrend reasserts itself. That doesn't means there won't be any sharp drops in the market, but rather that untill this bearish sentiment diminishes, any downside will be contained from a longer term picture perspective just like how it has been so far since the rally peaked in June.

There was quite a bit of bear capitulation today, but it seems like anytime the bears capitulate all it takes is a 2% drop in the market to give them back their courage and the moment they get aggressive on the short side they pull a Charlie Brown and fall flat on their backs and the cycle repeats.

I believe strongly that this rally will be retraced completely in due time but before it does I expect to see at least a day or 2 of choppiness. After that I will evaluate again.

The key to successfully trading these markets has been buying the dips and selling the rips...we just got one hell of a rip. But don't be stupid enough to go "all in" on any trade.