The Market Is Yellen

"Women gain dominance in a bear market." That's one of the more important tenets of socionomics.

That weak bounce from yesterday's awful close is due to Janet Yellen being officially nominated for Fed chair by the White House -- which proved it could finally make a positive decision.

It's great there will be a woman in charge. It's too bad it's a Keynesian like Yellen, who will likely take all the blame for the Fed's failures. Janet Yellen and all the money in the world will not be able to defend against an all-out debt liquidation when it occurs.

Also, since I view the market as female, well, why not have a female at the spigot. But for the record, my Ms. Market is way hotter than Janet.

The market finally made an impulsive decline yesterday. I safely got out -- right or wrong -- of the largest tranche of OTM SPY puts that I've held since the top in 2007. It was simply too big a position, and was put in jeopardy by the Fed's No Taper decision. The odds just weren't there after that.

But that does not mean the market still can't go much lower. It just means that I had on too much. Watch the DOW today. If 14,760.41 breaks, it could set up a test of 1627.47 on the S&P, or it could set up a non-confirmation which could be bullish.

I still have a Fib extension target at 1642.24, but getting back inside 1670.36 would be the first indication that maybe the S&P liked breaking the lower trendline of the rising wedge so much that it's ready to run once more. Getting above 1696.55 would pretty much confirm it.

There is still positive A/D divergence after yesterday's rout, and the TRIN and the VIX are showing signs of a market bottom. I'm not pressing bets to the downside here. Today will hopefully reveal a lot.

If women do gain dominance in a bear market, Yellen is yet another symbol that perhaps we've been in a topping pattern since 2000. There are two levels of interest to me should that be the case (which is why I gladly spec with OTM options): 1074.77 from October 2011, and the lower trendline of the "topping" pattern.

It's now below 600.