Are You Protected?

Judging the way the Dow, Nasdaq, and Russell charts look, the S&P is lagging. All three have reclaimed their triangle breakdowns and are back inside the previous range. The S&P isn't.

That is not to say that it won't be soon, but it may be the first tell that all ain't so swell.

At some point today or tomorrow, at the very least, I see the S&P dipping below 1230. I would look to be a buyer there as I don't think this run is over. In fact, the way the Dow, Naz, and Russ charts look, I'd say the markets are gunning for the October highs and possibly higher.

I'm not at all optimistic that this "bounce" is just another deep retracement on the way to much lower lows. If that were to be the case, I'd be very happy of course. But I don't see it that way. Yet.

Below 1197.35 would probably change my mind though.

However, that is the market's #1 job: obfuscation. A job it does better than even governments and politicians. I just happen to love the market. The fact that it cloaks its intentions only deepens its mystery. I can deal with that. I simply prefer not to deal with deliberate manipulation.

Meddling, manipulation, and intervention are sad facts of life in the markets as long as there are governments to regulate them.

As painful as it is to see people wrong-footed badly by Wednesday's coordinated intervention (one S&P trader on my stream lost over $10 million because he was short 2000 large contracts at $250 a point -- do the math), in my opinion the market hadn't yet given an all-clear signal to be short. That is why traders must have rigorous methods and rules to apply at all times, and, even then, should embrace hedging or similar ways to buy protection.

The market can do anything at any time.