Pondering the BBQ, Beer and the Bear.

May 18th, 2009 Posted in Uncategorized

There are times when I wonder and times when I don't. Concepts I ponder and concepts I won't ever see. The S&P is up this morning. I'm not surprised. A holiday market tends to trend higher.  I have said in the past that the S&P futures could see 950.00.  I'm lowering that down to 936ish.  We are in no danger of an overbought situation since before the options expiration.  We have A holiday coming up. Memorial Day. What better way to make grill talk - flipping burgers, turning the dogs, watching the kids play in the field, and drinking an ice cold brew by saying the market is making a come back and the worse is over.

I do not believe the worse is over. I believe we are in the eye of the storm. There is no fundamental news out there to make me believe that we are out of this crisis.  Unemployment is still raising, Credit cards are in default, commercial and residential property still defaulting, taxes on the rise, government debit on the rise and scores of other things.  Earnings are pretty much out of the way. Can the S&P stay up at these levels? We need one thing. Momentum.  It's still a traders market and nothing can be taken for granted.

S&P still has a a combined spec and fund position net long of over 75K as of early last week, and the trend is up. We are hugging the trend line, but nonetheless we are trending upward. Until that is broken we shall continue. One has to assume that break is coming and it could be painful.  Lets enjoy the holiday rally, but keep in mind...Just when everyone is talking the green shoots of spring, the bear comes out of the woods and we are on the run.

Good trading,

Dave Heltmach

Manduca Trading LLC

dheltmach@manducatrading.com

800.288.8802