Market Closes Above Key Level to Remain Bullish

Yup, still a bull market, a bull shit market. We watched as a bearish pattern was forming and solidifying throughout the day. The markets couldn't rally above the 50% retrace from the morning highs and consolidated in a sideways to slightly up, but choppy manner. We started to sell-off towards the close and if we had pierced the lows or even just remained down around the lows at the close of trading, it would have been a very bearish sign. Problem was there was limited market participation and as we descended towards some bearish levels, suddenly the buying started, eventually propelling us just above the 50% retracement and above yesterday's close, a bullish sign. I said bull shit to begin this post because it is hard to believe that that buying is not a little bit artificial, meaning some entity (i.e. the government), buys up the market to both counter selling pressure and to push price above a key technical level. The last 30 minutes was too unpredictable for me, so I closed out of my long positions before I could reap the rewards of the closing price. Very interesting market that is for sure, we'll see how long it will hold up...

Market Behavior So Far Today...

So we got a sell-off this morning after a gap up. We have seen many sell-offs in the past week that have been thwarted and reversed back up to see even higher highs. So it would make sense to want to buy this one. However, of all the reversals, this one has been the slowest to move its way back up higher. At this point, it looks to be just consolidating in a tight range which could be looked at as a bearish signal. It already touched its 50% reversal from this mornings highs, so we'll have to wait and see if it has the strength to move back up and go higher.

Maybe we are seeing a waning cycle of reversals. Leading up to the markets making new highs over the past week, we have seen many misleading sell-offs. The first one reversed quickly with strength, and each one after seemed to reverse with a little less strength until this morning's reversal (which happens to be the first one since breaking the 52+ week highs). This one looks pretty weak. It still remains above the lows and may even eventually move all the way back to today's highs, but perhaps it is a sign of a weakening market overall. If we do move back up and we see another sell-off, perhaps the powers that try and stop it won't have the strength next time around.

A Guessing Game from Here

We are at that crucial point where we are just above the highs and it is really impossible to tell which direction the market will head in the short term. It is a dangerous game because the market could just as easily move significantly higher as it could reverse and dip hard back down below the highs. I currently am holding several small short positions that are obviously negative. I bought some ES this morning as a hedge, but I must watch this position closely and manage my account to best take advantage of the next move. I will look to unload my ES position in the short term either way.