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| SPY April 29 2013 |
After a mild head fake lower, the market roared higher again. Clearly, there is pent-up buying demand even at these levels. You don't have to believe it, but it is there, today's action proves it. Where does it come from? Who cares, as long as it continues. You have to play what's there, not what you think should be happening.
Watch the uptrend channel, that is your guide in the wilderness.
The market is very cautious about bright lines - expect resistance at the intraday all-time high 1597 and at 1600. We may cruise past them, but then suddenly stall and reverse. The likelihood of a straight run to the upper channel level of 1620 is remote because the big boys will start selling as if it's a panic. The money men do this because they know the false significance traders place on these levels, and they prey on that fear to flush out weak hands and take their money. Just stay on your toes as those levels approach and trail stops or watch conditions carefully or do what you normally do to protect your positions, that's the likeliest spot for an induced shakeout that ulitmately will reverse to the upside at some lower level.
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