5/9 Pre-Market notes

This Is What The Wrong Way Crowd Is Doing, link to Yahoo Finance.
http://biz.yahoo.com/tm/050505/12566.html
It is a fact that most of us small traders are wrong most of the time. Right now, odd lot short sales are at their highest levels ever. And specialists short sales are at their lowest in decades. That's the key point in the article.
...That factor alone may be all we need to know about which direction the market is heading in the short term.
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...The PTB were able for force their follow through day on the Nasdaq this week, and also closed the S&P at 1171, finally breaking through the huge resistance at the 1163 level. 1163 now becomes important support. As long as it holds the bulls have a chance at a near term run to the upside. If you are a very short term trader, shorts look to be the wrong place at the wrong time now.
...But in the more intermediate term, I think there is still a lot more downside coming.
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The Russian Trader,
http://www.russiantrader.com/trading_room
has become one of my favorite sites. Although he trades options and I don't, I enjoy his take on the markets. His latest comments were posted 5/7 in regard to the S&P 500. He had expected the latest rallies and now expects that the S&P needs to consolidate in the 1160-1180 range. However, he doesn't believe the move is for real. As he explains it, "...the last session shows us how weak the market is. It's not the way how da bulls run. It looks more like how da bears die. That means that we're in the process of much larger distribution."
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BrainFood on StockCharts.com,
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID641835
another interesting link, is the home of The Week Ahead Report. If you want to check them out, you'll need to do it fairly soon, it appears. He announced plans to his report subscribers over the weekend for setting up an independent for-pay website. He says he has 2000 subscribers now, and is hopeful that perhaps 300 of them would be willing to pay for his services.
...Anyway, he also expects a short term bounce to the upside, very short term, preceding a much larger move to the dark side. His charts are interesting, and if you go to the site, he explains in detail his reasoning.
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...I agree with both the Russian Trader and BrainFood sites at this time. I have been expecting a bounce, and we are getting it now, but I am not at all convinced that it is for real. I still think the markets have much lower prices in their future. I am not seeing enthusiastic institutional buying, and the new high/new low numbers, while improving, are still not bullish.
...I think we are seeing stealth distribution. The big guys, the ones who really matter in the markets, are skittish. A couple of very strange things happened last week that smacked of both apprehension and intervention.
...The Chinese appeared to put a toe in the water last week regarding floating the yuan. Immediately, the markets started reacting in a nasty manner. Then came the announcement that rate change was merely a clerical mistake, and reverted.
...Then, after the Fed announcement last week following the latest rate hike, the markets once again started tanking. Apparently, the PTB were disturbed by the market action, because five minutes before the close of trading that day, they announced another clerical mistake, a typo, if you will. One sentence had been inadvertently left out of the press release. Whew.
...I don't know about you, but I don't buy either one of the clerical mistakes listed above. Then there was great news on GM which sent that stock up rocketing up, only to fall back to earth the next day when their debt was downgraded. How's that for distribution from inside, connected money?
...They say the markets like to climb a wall of worry. If you believe that, then the markets should do just fine, because there is certainly a lot to worry about out there. Personally, I think the bear market is back. As always, time will tell.
...Happy trading to all.
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