...lunch meat

No reason to be wishy- washy, the market got the post- holiday stuffing kicked out if it with one day losses of nearly 10%.   Almost every possibility, we discussed in the previous week came to fruition as the Bears got the turkey leg off the rally feast.   At Mondays closing price with SPX at 850, we wrote...

.."Is the day and change rally sustainable?. Guess, the thinking here is simple considering we were going short the SPX end of day.  The good thing is we get any fantasies of an extended run out of our heads quickly as the market does all it's talking in a very fast way, as in 10% gains in hours. Our emotions don't need to be build up over weeks only to be let down once again.  It hurts more that way, this is better. The only thing that could sustain this is the fact it's a holiday week and most may just rather wait, maybe even let this market climb a bit more into some potential bad news till next week and than go short."

By the time the market broke 870 later on,  most were on the topic of a inverse head and shoulders breakout or something and we squeaked out 890+ overnight into today's trading.   Unfortunately,  we got everything that was feared...the market was led up higher on lower volume during the week, only to be reduced to turkey bone of 815 SPX level by 'Whales'...equity desks continued to see institutional/real sellers (along with some fresh shorts) hammer the market into the close, with ZERO demand on the other side of the trade = a very heavy market.   Also the 'bad news',  which we said seems to have a gag on during holiday trading week flowed in.   The abundance of bad news was widespread, international and domestic, brutal China manufacturing led, Russia, S.Korea, U.S,   some ominous credit stuff such as the chicken stock flying the coop into bankruptcy...Reluctance from Germany to participate in large fiscal stimulus measures (Germany is needed for any large European plan). ....Despite Holiday sales coming in better than feared - concerns over Dec. sales and margins given the highly promotional environment, and the potential for the fragile political situation overseas to disrupt commerce.   Oh yeah, when the gov't officially announces we're in a recession there is no rush to buy anything.   Nice of them to wait till today after everyone's turkey fun.

As we alerted,  if 840 was approached as it was starting to look as a possibility or else why would we alert market conditions intraday, the Bull would be leftover meat!.... 815 from 890 is just that end of day.   We also posted the Inflow/ Outflow summary from the previous week that showed it was just retail traders pushing the market up as there were no funds flowing into longer term equity funds during the bigger volume days of the rally.    The last thing we wanted to see was such action for the health of the market going forward,  such a beating knocks the life out of a lot hope out the window brought on by last weeks Obama antics,  bad news shrugging off....weekend journal... "Right now, we are looking at an extended market that desperately needs a pullback.  However, we have to be careful of what we wish for as a pullback can turn into a nasty collapse like in early November. What we keep our eyes on is the health of financial stocks".   Today was the nasty and financial stocks took the brunt of the beating.   The only positive is Meredith Whitney's comments were taken the wrong way in some respects to consumer credit cards and a morning bounce of sorts maybe in the cards or it just may bounce some cause it was such an ugly close and can't get uglier, just yet.   We're flat going into Tuesday's trade with Capital Hill/ Automakers shenanigans on the agenda,  we'll wait for the reaction.