This is the second day in a row that the SP 500 has 'popped and flopped' in a failure to advance its admirable weekly gain on the back of the Central Bank initiative to make more dollars available globally.
The big drop in the headline unemployment percentage was totally misleading. And we took some shorts near the apex of that pump and dump, flipping them into the close.
So what next?
The SP needs to close the year around 1250-5 in order to end the year 'flat.' There is some political-economic desire to make this happen, so this will not be counted as a 'losing year' for US stocks.
The headwinds are a tremendous headline risk out of Europe, and a somewhat hidden Bank instability of the insolvency and the liquidity kind. The game plan to date has been to patch up the liquidity problems in the short term, and to hope that inflation, time, Fed monetization, and phony accounting help to avoid the insolvency problems.
The SP 500 managed to fight its way back into the small symmetrical triangle, but remains in a larger one from 1160 to 1255. They may end up at the top end of the range into year end, but the risk is that it breaks down again, and falls through 1160, which sets up a decline of about 130 SP points from there to retest the lows of the year and then some to 1030ish.
