Today was FAZtastic.It didn't undo the damage from yesterday; that was a shotgun blast to the chest. But I did claw my way one-third back from yesterday's devastation, and it's a good (albeit exhausting) feeling. FAZ played a role, and I'm glad I decided to give the old bugger another chance. I really did feel financials were full of hot air, and some of that air was allowed to escape today. Below is the FAZ, as well as its ever-increasing volume.

I wanted to focus on the S&P 500, since its direction basically determines all of our fates. Let's face it, no matter how bullish or bearish an individual chart is, its fate is going to be largely at the mercy of the broad market. So understanding the likely direction of the S&P is critical to profitable trading. Here's what the S&P has looked like over the past half year. One interesting thing people have quickly forgotten is that people were having heart attacks last November that the S&P broke 800, but it only was there for two days. It just spend the entire past month below 800, and people have become accustomed to it. In fact, they were thrilled it was wayyyyyyyyyyyy up at 800 again! How soon people re-acclimate.

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But I want to point out that, besides the line in the sand at 800 (which is mildly tough; I wish I had shorted more /ES this morning when it was bobbling around 800, but yesterday's wounds left me too sheepish). The more important levels are 881.38 and, the really important one, 1014.14. The area around 1000, which is both Fibonacci retracement as well as the underbelly of a huge descending trendline, is going to be the Incredible Hulk to the bulls out there. I hope I can be a decent trader as we might our way up to 1,000 this year, but God Help The Bulls when we get there, because I will turn into a snarling maniac. I won't be talking about 666. I'll be talking about 400.

Here is sorta kinda how I think things will play out. Because I am blessed with an amazing intellect, I have created this using the WAG technique (ahem; Wild Ass Guess). The timing is probably more squished than it should be; a plunge around September/October would be more poetic; but the chart below smells about right ot me in terms of what 2009 holds.

My main challenge, as I imply, is to trade well on the way up. I'm a better bear than bull, and I really, really need to fight back my bearish nervousness about holding stocks. That's it from me for now. Good night!

I'm in a series of back-to-back meetings, but in the meantime, here's an interesting stock I own. It's one of the few charts I've seen lately which looks like an honest-to-goodness buy-and-hold.

I was glancing at MarketWatch early this morning, and I saw a couple of items which caught my eye. First, this, on the home page:

I read the article itself, and it's just as fawning and sycophantic as the blurb. Grownups? Saving the economy? We have a true believer, ladies and gentlemen!

I was also intrigued by an article about how Dines (the newsletter writer) is predicting hyperinflation. In discussing Dines' work, the writer states:

When I was warned of "cryptic comments" (to say nothing of "larded"), I braced myself for perhaps some high-end mathematics or unfamiliar Greek symbols. And what did we get? "Looks underpriced at these low levels" and "for conservative long-term portfolios." Whoooooooo-eeee! It's almost like he's talking a different language!

Based on what I've been reading, there appear to be a few different camps into which active technicians fall with regard to what's ahead for the market. Please note I am not trying to speak for other cites, but I am citing the examples below since it is my impression these sites generally postulate the accompanying dispositions.

1. Major Move Has Started – (example: Elliott Wave International) – the idea here is that 666 was the low, and that low isn't going to be breached for many months to come. A multi-month rise to 1000 or more on the S&P is contemplated. At some point, perhaps this autumn, or perhaps even early in 2010, the bear market resumes in earnest, and holy hell is going to break loose.
2. Major Plunge is Imminent (example: xTrends) – This actually has a similar conclusion to (1) above, but the idea is that 666 wasn't the low yet, and that a somewhat lower low (in the 600 to 650 range) is coming soon. I'd prefer this to be the case, but recent action makes me doubtful. The public doesn't really seem to care about the consequences of $10 trillion in money being minted out of thin air. They just want their 401k to go up.
3. Small Dip in Short-Term, Followed by Multi-Month Rise (example: Evil) – This also follows the path of (1) ultimately, but this is a "soft" version of (2). That is, we'll soften up to anywhere between 730 and 770 on the S&P and then start chugging higher.

Molecool and I tend to agree on market direction, so it's no surprise I'm in the "3" camp myself. Today's modest bit of weakness may be the start of it.

Well, to all those who gobbled up financial shares yesterday, particularly near the peak – congratu-f*cking-lations. Enjoy your worthless stock. So far, it's a much better day for me. The same can't be said for the P.O.S. symbol C: