Quick Update December 3rd, 2010

Except for the market leaders, $TRAN, $SOX, and $RUT, it was kind of a pause day. No? If I had to guess, I would say that the mad men at the helm will do their best to gap up the $SPX on Monday and get it above the 1228/1230 level.

While the manipulation is benefiting me, I really get tired of it. Anyone watching IWM today knows that what they saw was nothing more than a perfectly engineered, POMO fueled, computer driven rally. But make no mistake: These guys are very serious and you simply cannot front run them on the short side. As I’ve said before, the Fed is providing all the liquidity necessary to get all  the fat cats out of equities before the capital gains taxes increase and before the Bush tax cuts expire.

But I digress:

Chart of the $RUT showing the very high RSI. The reading is 77, but I had to cut that part off. Suffice to say that the RSI did get up to 80 on 11/5 and so it’s possible that it could get that stretched again before it has any kind of reaction. Regardless, it probably isn’t going to stay at current elevated levels for too much longer. Famous last words?

Click here to open chart in new window.

Chart courtesy of StockCharts.com

That’s about it for today. $NYMO & $NAMO moved further up and away from their respective zero lines and as long as this continues you just have trade the long side.

Have a good weekend.