In spite of yesterday afternoon's earnings bomb from AAPL, SNDK, AXP, and others, the market ended up way in the green today. I was saved only by my energy puts, as gold/oil fell in conjunction with the dollar's newfound strength.
Because of the strength in banks, the $RUT has been especially strong, pushing up an amazing 2.75% today. In fact, much of the Russell's drop over the prior weeks has been all recovered in merely five trading sessions! Bear market rallies have a well-deserved reputation for being fast and merciless.
Looking at the intraday graph, the Russell has retraced to its neckline. This is a very well-formed head and shoulders pattern. If it keeps pushing higher from here, we could be in some trouble.
I refuse to go through another mid-March to mid-May exercise, where I blow all my hard-earned profits fighting a huge rally. So I am being very defensive here. But the above are the most meaningful patterns I am watching. Good luck to you and me both, dear reader!
