February 29th, 2012
in Gary's blogging
10:26 It has been stated by pundits more knowledge than myself that the potential double tops that are in place have a specific number. For the DOW it is 12840 and 13956. For the SP500 it is high as 1547. The current thinking is 1407 will be the stopping point.
First one must realize that the charts have been trashed because of low volume and they only give you a historical reference point. Today the algo machines, DaBoyz and floor traders are in control doing whatever they feel is best for them in making profits. They can run the markets up or down as they please.
What low volume does to these "lines in the sand" numbers is make them an approximation that can have a wide variance and looks like a zone. The 500's number of 1377 made this morning really is the high end of a zone somewhere between 1300 and 1377. The higher the number gets, the more difficult it will be to reach further.
Only higher volume, that is, more participation will make market levels valid; somewhat like voting for those dumb politicians in Washington.
So today we see the 500 rise to 1377 only to run out of steam and fall because DaBoyz were ready to short and catch the uninformed with their pants down. Nice profits are made this way if you are among the insider groups.
The way I see it is the market will continue to melt up until some sort of bad news or serious profit taking takes place. Even the red volume is low. DaBoyz are playing the market like a fiddle and taking the money of those who are not wise enough to see what is happening, something like Washington politics. Nothing serious has really taken place just yet, but that time is coming.
Fellow traders have patience.
The DOW is at 13023, the 500 at 1375, SPY at 137.90 and SSO at 55.74.
Written by Gary