...reversals..reversals..

Entering the trading day, pessimism was abound as the SPX  futures touched 829 overnight and no matter what early upside was shown,  you had the gut feeling we were going to test that level at some point intraday.   It became more clear we were going down due to the lukewarm reaction to HPQ's guidance in the SMH, Nasdaq etc.     A feeble attempt around noon to make highs piled in the shorts and by 3pm we had touched down to the overnight 829.     Even though it seemed buyers had become lackadaisical after 2 days of distribution,  seemingly ready to just let the market begin another leg down....but,  instead they stepped up to plate and drove the SPX 40 points just after close to 868.   The saving grace to us was that the market was only down 150-200 Dow points and so was not in panic mode at the retesting levels.   If we had opened and gapped down,  it might have been a different story.    Maybe, we've all become immune to be scared, we've seen almost all this market can cook up and calmness seemed to rule at the bottoms today.    Maybe it's just acceptance we are going lower one day or another,  maybe just not right now.     One positive for the next little while is everyone now knows buyers come out of the closet at these levels, support is being shown and so once, twice...three times a 'bottoms up' day, may emerge once again down the road.

Most likely,  we gap down some in morning as the late gains are digested,  at that point the market will begin to show if a follow through day is possible.    If this is the case, an upside trend bias should emerge into expiration date.   The market won't wait for Friday to make a move,  it would just carry through late Wednesday into Friday morning, simply it would make the biggest move Thursday in our view.

As far as individual stocks there was not much movement into the close,  it seems all are fixated on the SPY-SSO-SDS as we've been here.