Three Observations

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I'm not going to pretend to not be disappointed by the strength of the surge since last Wednesday. I expected a bounce, yes, but not to this degree. First, I will point out that the broken wedge is still very much in place, and we haven't violated anything to invalidate the pattern:


Second, the topping pattern for technology is more superb than ever. The bifurcation of the market continues this evening, with RIMM getting crushed and ORCL somewhat higher, so it'll be interesting to see how this all shakes out on Friday.


Third, complacency has come sweeping back into the market with breathtaking speed. A week ago, the world was aghast at the deluge of bad news. Now, only days later, it's as if everything is just peaches 'n' cream, and nothing nasty has happened for years.


Over the past week, I have become increasingly defensive. My portfolio is 60% committed to positions, 21% of which are long and 79% of which are short. At this point, the market's really going to have to turn over soon if this wedge is going to sustain any meaning or purpose.