So, has the rain (pain?) in Spain gone away? Or is the cloud just blowing over to any of the other Euro countries? Was Cramer's "Market in Turmoil" special the defining point of the bottom, or just a way station on the way to more painful levels? The sentiment of the stream and the media swings from extreme to extreme so quickly it brings to mind what a monkey on crack would look like, and rightfully so. We go from the financial system as we know it being on the precipice again, to a country being rescued again. Then we realize there are more leaks in the boat and wonder whether there is enough cash in the world to plug all the leaks. Hell even Goldman Sachs, those amazing traders who only lose money one day per quarter can't get it right, bullish at over 1400, bearish as we cross below 1300 and bullish again over 1325. Are they on the monkey's pipe too?
The big gains that appeared last night have melted away as the morning bleeds toward the opening. What had been a 20 point pop is only 4.5 as I write. I looked at the charts trying to find reasons to believe, but unfortunately a few things keep nagging me. The wave count and I use this only as a framework and keep in mind how many times before I have seen bullish morph into bearish and vice versa, still looks negative. Five waves down looks clearer to me than anything else.
My thesis is, don't chase. If you're long coming in today, I'd take some off into strength. We are straight up, so sell a piece, hope you’re wrong and keep your finger on the trigger with the rest in case you're right. Best scenario, we go sideways for a few days, create some new setups and the macro news items stay benign. Trade em well!