Market went down today on a relatively unimpressive volume. People are waiting for the Earnings season to give some "news of recovery". My guess is all bad earnings news, such as Alcoa, will be considered old news and market will not move much but if there is any mildly good news like that of RIM, bulls will make a lot of noise and push the market higher. The low volume today is very instructive - the market wants to move higher. It just needs more participants. The bulls have to suck more people in the game. The mantra now is that recovery will be in the second 1/2 of this year and by some magical reason stock market should move ahead now so as not to be left behind. What happens if the recovery does not materialize in the second half? These naive bulls will be destroyed. Stock market is not a forward looking indicator but rather a casino for these people. you place a bet, and may lose everything if the bet does not pan out. I am watching the 50-day Moving average, which is around 795 on SP500. There will be a trade if we pierce 50-d MA. Probably you can trade between 800 and 760 on the downside and between 800 and 850 on the upside. Or, you can stay out of the game because trading range is not wide enough. I am staying pat for now. The P/F chart is showing warning signs.
Thanks.
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