Market Amnesia

Asia, Europe, and most futures are up strongly this morning, as if yesterday never happened. No memory.

And what did happen? Well, the S&P for one filled a gap and also revisited its 50 day MA. After that, it never looked back. I'll be curious to see how it acts should it the futures reach 1320 or 1322.94 on the cash.

Regardless of how it acts, the fact is that for many moons it has shown more volume on down days than it has on up days. Would you believe this has been the case since May of 2009?

This is yet another reason why I distrust the market's health. And yesterday was yet another reminder.

Perhaps a great number of others distrust it too. Could that be why it sends so many conflicting signals? For example, yesterday my bias flip-flopped several times. I was looking for a bounce, then I was looking for 1305.26, then I wasn't then I was -- all because of conflicting internals and indicators. I got smacked trying a long just a little too early (just slightly inside my self-imposed "no-trade zone of 10:30 -- 11:45 EST) and got stopped. When I saw the ES stabilize and reverse non-impulsively and then keep going, I went back to trading the 6C against my USDCAD position and recouped the loss with interest.

What happened yesterday has also happened more than a few times now since February of 2010. I was short from the January highs but missed the buy at the lows because I was looking for just one more probe down. Why? Because of the wave patterns.

Same thing happened at the July and December 2010 lows. Same thing yesterday. Wave patterns. Muddy, messy, non-impulsive wave patterns that do not feel like bottoms but bots -- algo-created support just long and strong enough to get the herd back in line.

I'm embarrassed to say so, because I have always had little use for fretting about market manipulation. But now that the Fed has publicly admitted it engages in it, I'm more open to the idea that these may be the actual footprints of it.

Who knows, but it only cements my thesis: that the major stock market indices and the dollar are in large corrections, and sellers repeatedly show more aficion than buyers.