The Most Likely Path?

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The simple fact of the matter is that my profits are still coming from shorts. So while it's nice to stick with current positions, I (still) would be a lot more comfortable if we were able to tack 30-35 points on the /ES to lull the bulls back into a sense of complacency.

Where those 30+ points come from could be anywhere – Bernanke's potential confirmation on Thursday seems like a good candidate. Here's one possible path:


As I'm typing this, the /ES is up three points, but that is meaningless. Late night/early morning action over the past few sessions has been interesting in the context of the entire chart, but it certainly hasn't been a precursor to the normal session the next day.

No matter what, tomorrow (Wednesday) is just about guaranteed to be interesting. Between the JesusPad, FOMC, and the SOTU, there's going to be all kinds of fireworks. Let's hope for us traders those fireworks turn out not to be duds! I'll see you in the morning.