The market technically went up today, but relative to its gap-up open on what frankly I consider to be absurd ebullience. I find it amusing that the word "ebullience" has "bull" in the middle.
The move up from 1202 looks like this now. Notice that each successive high occurs on an increasingly shallower slope, and that we are once more under the thick orange line that had stopped most of the previous retracements of this move. Yes, we gapped over it today, but failed to hold it. This indicates that the market no longer thinks that line is important.
Today's high went above the 1301 target. That's okay, because it is still within the .786 retracement range of 1301-1307 - not to mention it reached this value with the help of a gap up, which results in stops triggering, shorts panicking and covering, etc. The market may want to hold on through opex earnings week, but I think this reversal - even though we closed higher - means that risk isn't exactly as on as it was during the festive holiday season. Yes, we rallied late in the day, but we also hit short-term oversold conditions, so that wasn't so surprising.
Several of the banks are not looking good. C gapped down and crapped. It topped on the 12th, but is showing improving 10-minute technicals and therefore probably should correct fairly soon. BAC closed down ($6.48). MS closed down. WFC closed up - it should be worth noting that Wells Fargo's reaction to the 2008 decline was quite interesting. They were trading at around $30/share until it happened, blipped down to $7 a share and then skyrocketed back up to around $30/share where they still trade. (I.e., they recovered much better, but I'm not sure how much of that is due to absorbing Wachovia.) Goldman Sachs, the bank everyone loves to hate, was down as well.
I think we could be done here. I think.
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