Let The Markets Decide

Last Friday, I tweeted that my bias had flipped to the upside for the next several days. I also added the caveat that "it must be subject to change as market patterns release more and more information. Let the markets decide for you."

Judging by the way the futures acted last night, the markets look like they could decide for us sooner rather than later. As always, I'll reserve my judgement until I see how the S&P cash index opens because it doesn't trade. The futures can be pushed around and moves can be exaggerate in low volume overnight sessions, especially when leverage is employed.

I've gone flat at the open just now, dumping the SDS and a small SSO position from Friday afternoon. I'm more content to stand aside on Monday mornings and let the pent up emotions from everyone's weekend reading play out. I'll be watching the 1263.21 level for a break. The 200-day moving average may be in focus again, sitting at 1273.

However, the market can roll over and play dead any time it wants to. My read is that any failure to power higher at this point could cause a mass exodus -- or -- maybe some sloppy weakness down to the 1150-1160 zone before one last upthrust. That would complete the 3-leg move I've been looking for.

The markets are slowly deciding that Italy is the next problem. I don't think this is priced in at all. But only the markets will decide when it should be. Until then, I am patient.