The holiday weekend showed that Syria is now a political tool. Congress is to vote on the situation rather than Obama taking the lead. It has delayed the process and the market responded with a holiday rally. However this influence will diminish as time goes forward. Therefore any rallies associated with Syria will probably be short lived. The situation with Russia could have more dramatic implications than any other situation of Obama's presidential career. Putin has demanded proof of Syria using chemical weapons. It seems that Putin is trying to draw Obama into a gun fight. The market will not digest this very well. Therefore is vulnerable.
I want to point out that the institutions were noticeably absent Wednesday as evidenced by predominant minus tick throughout long durations of the day. However the S&P held their prices. This is kind of interesting seeing as it is impossible except by manipulation. We were into the third trading day of the month and Bernanke and friends are having fewer members to their team but still able to maintain prices.
The bonds retested the 2013 lows at 128 '12 over Thursday night. The previous lows was 128 '13 and then we saw a rally. There is fear that the economy is overheating and therefore the Fed accommodation is going to taper soon. This is a millstone handing around the neck of the bonds and I always believe that the technicals will win.
This was an incredible Friday inspired by rumors and news. We saw high plus and high minus tick mimicking a whipsaw, this leaves very little doubt that the rescue this morning was Federal Reserve induced. Therefore the extremes that we have seen may carve out a new trading range. Our advisory trade recommendation was executed successfully for 3 points of profit.