Fear

Here is a scene from Tallageda Nights.  It describes what can happen to a trader after they make a bad trade or a series of bad trades.  There is a fear that the next trade will be a loser again and they start to second guess themselves.  A trader has to learn to trade with the fear.  Watch the clip and exchange "driving" with "Trading"

Won't be fooled again!

So last week there was a large scale slaughter of many bears as the H&S failed and was a fake out by the bulls.  I always like too look back and see if there was some signals being given to show the fake out.

The first part of this sweet pump-fake out was the sell off it was strong and fast, lead by TICK and strong negative breadth.  The pump was set up.  The bears were running towards the shooter and thinking "He is shooting block this shot".
Then the market fails at 885 and starts ripping down, and this is when the bears think the market is going to break those lows.  This is the gray arrow.
BUT! this is what the bears should've saw.  During the second move down, there was an increase in positive breadth, tick was increasing and negative breadth was decreasing.  These were not bearish conditions. In fact the market had started a new trendline up.

So running full force at the shooter, thinking shot all the bulls had to do was wait for the bears to jump, dribble once and drive it right to the basket.  
So the lesson to learn from this is to watch breadth and make sure its still trending in the direction your position is going.  Don't get burned by a fake out, now that we know what one looks like we hopefully won't get faked out again.

We could be seeing another possible fake out as the market has climbed on positive breadth that is declining?  Could this bear fake out?  Stay tuned to find out.

Here are some even better fake outs by the great Pistol Pete:

Slowing Down

Mega B hourly shows that since Wed the volume on the upside has slowed down yet the market has advanced, but look at the down volume and decliners they have increased.

Now go out and enjoy your weekend!!! And take thanks that your not MEGAN C! Great post by ZEROHEDGE

It's beginning to look a lot like Christmas

The current rally has some striking similar patterns to the rally in late December of last year.  These patterns are shown on the MEGA B chart

There is a drop down to support prior to the move, then a quick 3 day move up and the market stalls.  More similar are the Volume Moving averages and volume patterns.  There is complete drop of declining volume and the moving average reaches a low point.  Also notice the sharp jump in TICK.
If that isn't something that matches, lets look at the hourly chart.
Here is the current chart.

 RSI above 80, long climb in the MACD and a STOCH that is well overbought an chopping around in that area.  Now take a look at December-January chart.

RSI above 80 again, STOCH chopping around overbought and MACD shot up.
The market is testing its June highs again this could provide some resistance and with the market way overbought short-term there could be a pull back.
Of course, if everyone has now turned bullish(Whitney, Roubini) this market can keep rising up till 1000.  I am looking for the gap to be filled before next week.

Holy Overbought Batman

SPX Hourly is still overbought, does this mean the market will go down.  But there is still an unfilled gap from yesterday and on the hourly chart the market tends to move back into oversold with in a few days.

Also last time RSI was at these levels was in January when the market dropped.  Looking for a pull back here.