Filling a gap with a gap

Well, we sure filled that upside gap quickly didn't we? The problem is...now there's a gap below us, which if history repeats as it has during this 5 week trading range, will be filled in due time even if more upside progress is made from here.

I continue to see frustration from the hard core bear types some of which have thrown in the towel or are on the brink of doing so. Of course, they will be quick to turn bearish the moment the SPX drops 5 points. It's like a crack addict for these hard headed jokers. They can't stop being bearish no matter how much punishment they take. And I've never heard these perma bear clowns even once mention the improving data such as the normalizing of credit spreads, explosion in earnings, positive trend in non-farm payrolls and the steeply sloped yield curve to name a few. Nope. According to them the market has been going up mainly because of Goldman Sachs "rigging" but if that's the case then the global equity, CDS and corporate bond markets must also be rigged as well by Goldman Sachs since they too are trending in the same direction as US equities. That's what... at least $300 trillion that GS is rigging? That's a whole lot of rigging don't you think? rig, rig, rig, rig, it's all a rig. Your favorite sports team loses a crucial match....it was rigged....the ref was being paid off. You fail a test....it was rigged....they wanted to fail a lot of people on purpose. You bump your head against a wall...it's rigged....the wall shouldn't have been there. You make a good trade...it's because you were such an intelligent, savvy trader. Blame everyone else for your hardships and take all the credit when things go your way....what a great philosophy to live by. Actually, losers in general think this way.

This trading range as been crunching traders left right and centre and I'm glad I've had nothing to do with it. Indicators are still not giving a strong IT signal one way or the other and so as a result I continue to do nothing with respect to index based trades. One thing notable is that NASDAQ has in fact broken out making a new 52week high and that's bullish because the NASDAQ has been the market leader which means the SPX may very well follow. But with today's gap unfilled odds are high that we'll see it get filled in due time...perhaps after Christmas.

Take a look at the following Yahoo message board post I just read


I am on the verge of the final solution.

I have been decimated going long last January and going short in September trying to time this manipulated ponzi scheme. I have been wiped out.

I am not a stupid person. I follow the markets closely and am very knowledgable in ta but i did not use stops. It kills me to see the sheeple who have made lots of money just buying into the propaganda that has been fed to them while i follow the markets as close as anyone yet i continually get fukked.

My savings have been wiped out. I am a failure and i want to die. I pray to God to take me in my sleep.

Amen.


That folks is capitulation and I've been seeing these posts all throughout the summer anytime the market makes a new high. One by the one these retail perma bears will capitulate until 90%+ are wiped out. We're not there yet folks. But admittingly these types of posts indicate a ST top isn't too far off. But for anyone who thinks this is a sign that this rally from March is hitting a final top...think again. With the market near its highs we should be seeing people brag about how much money they have been making not crying about how money they've lost. The latter simply indicates the likelihood of forced capitulation due to crippling loses. When I see most retail investors actually start embracing this bull market then we'll be in the final stage of this rally. Until then, capitulation such as the above is only indicative of a possible ST top....nothing more in my opinion.

During this agonizing chop I have uncovered what I believe is a very promising sector - Geothermal. There are a handful of stocks worth considering which I will mention shortly.