This is the most volatility I’ve seen in the Stock Index futures for a long while. And I know of what I speak. Back in the late 1990’s we had regular 200 to 300 point trading ranges in the day session. We would explore that trading range sometimes 2 or 3 times in a day. To see a few sessions now of 200 plus trading ranges, we may be moving, finally into a topping cycle in the Dow. I emphasize MAY. We got our triple in the S&P, but not quite a triple in the Dow. That target remains 19500. But maybe 17,280 is as close as we’re going to get. Time will tell. WE have support in the charts at 16,589 and then 16,400, finally 16,143. Last Thursday I got short looking for the break and then got stopped out on the pre-unemployment rally. That was not much fun. The smart thing we didn’t do was flip and get long last Friday. So we avoided a whipsaw trade. That being said, the Dow has dropped 398 points in 48 hours. Definitely we have got vol back! For Dec S&P we have 1918 and then the August low at 1882. This is a good thing. Its going to give lots of opportunity to catch 100 and 150 point moves. The rest of the week could give a lot of opportunities. AS for the big picture.. this might be the beginning of a grinding lower market. I find it ironic that the Democratic mouth pieces on Sunday morning talk shows were finally taking credit for the economic rebound. Will they be there to take credit if the Dow takes a dump down to 15,500 on a 10% correction? My guess is , the sell off will be the fault of their political adversaries. CER
