Let It Flow Freely

The exuberance from the fiscal cliff resolution is absorbed. And, our new trading environment is changing, like usual. The bonds oversold condition is not providing any sustaining bounce or energy. Typically a short term oversold of the recent magnitude provides a minimal bounce of at least 3 points. Without this bounce, the start of a bear market is indicative. There is no adequate substitute for tape watching. It is more reliable than any indicator. Having said this, Thursday's S&P performance looked phony. Could this rally have been Lew induced? Do not put it past our government. They manufactured a rally shortly after the new Treasury Secretary was named. The rally through 1460 looked as very artificial as well. A move through previous highs with authority will create high plus tick. There was not even a plus 1000 tick registered as buy stops did not appear to be triggered. This market has showed bullish tendencies. However, this latest rally expressed little confidence, if any for short term trading.

In the S&P 500, an overall docile market was demonstrated ever since the 1st trading day of 2013. Patience is always vital to better trading. It seems stable right now. Although this is not good for day traders. A short-term day trader profits less with little ebb & flow. A healthy market allows it's energy to flow freely. An unhealthy one will confine it. Breaking out in either direction will probably trigger soon.