No man's land...

Tug of war lasted for about a couple of hours before the market finally made up its mind and ended the day higher.    This is definitely nothing to be cheered for as most of us feel we are merely rebounding from yesterday's nasty selloff.   Short term trading range is likely.  Some levels to watch...SPX 826, 800, 752 support; 848, 860 resistance on upside.

Shall we even rebound at all for an extended time?   Currently, many of the cards are held by the government to decide the outcome of the big three auto companies.    In fact,  much of today's optimism was directly from the hope that a deal will be reached and money will be granted to the auto makers.     We feel that even with the infusion of all those billions into the auto makers, given the current economic condition,  we are only delaying the inevitable.      Basically, assuming these auto makers do get their wish next week,  we are only going to get more turmoil (pain) from the sector down the road.

Originally, we were hoping that a restructuring of the auto makers +  Citi bailout can potentially give us the bottom that we seek and need.     As of this moment,  the theory is still up in the air and verdict is still out there.     Therefore,  after today's rebound,  we are literally stuck in a position that we need to see further movement before we can make an intelligent trade.   Lots of negative tech headlines after the close to dampen today's move.    Until this market changes its recent way of trading,  we are going to fade the move with a downward bias.    It means that we are more eager to go short on strength than buying on weakness, except for a few recent DJIM plays that we'd buy on dips.     But, consecutive down days would most likely get us on the long side and short up bursts would be a better shorting opportunity, in our opinion.

This week,  we have one of the most important economic indicator to be released, employment report.    Market can flip flop between now and then but,  we think the job report can set a pretty big tone for the entire month.    ADP number will be glared over Wednesday as well.   Assuming the accelerated downward economic trend continues,  how would you like to end the year with?    Bunch of beaten down assets or lots of cash?    Unfortunately there's really no in between alternatives.    These days, you are either in control of your financial situation or the market controls you.     The idea of a Santa Claus rally is fading fast as long as this market clings onto the hope of a quick turnaround.