..Closer than you think!

Amidst this fast rally, you almost can't help but fall asleep at the wheel in regards to watching the digits of the DJIA.  You notice the100pts here and there, the back and forth swings, but you don't really pay attention to where DJIA 12800 is in comparison to where the market stands intraday.    Simply, we've moved so fast the past 2 days and 30 minutes off Friday that our closeness to 12800 was actually a surprise of sorts.   We noted this weekend 12800 is what really mattered and that we should try to brush those 'triangles' off to the side.  This rally has swept not just brushed the triangles off in fast and furious action,  but now has all eyes squarely on the next resistance at 12800 and the potential long side trades it would hold if broken.    Now, 12800 is just the sexy psych number, in reality what we are looking at is to break through and close above the Feb 1 high of 12767.     That's where the 'closer than you think' comes in as we hit a high of 12743 today.  Truthfully, we hope there is a sane pullback off this extended action.   One reason is we wouldn't mind to get some of our DJIM plays back cheaper before the markets kick it up again.   We know they held up well in a rough environment,  let them show what they can do in a better environment.   Monday,  we were releasing many of those extended plays from here, today we saw more of the extended feeling spread to other stocks we monitor.     Notice all the the stocks here hitting NCH's yesterday did not participate at all today.    That shows us they were extended the day before as they did not play along in the rally today.    What is quite amazing is this fast move has not included the momentum NASD stocks we have always associated with a move here the past year...The RIMM'..AAPL's have struggled for this entire move!.  As well, the Finanicals have not participated beyond intraday swings on the monolines headlines...the GS, MER, BAC etc...the XLF.    Something has to give here amongst the XLF and QQQQ's and it would hardly be a surprise to see a group(s) wake up for a day or two and try to lead the charge thru 12800.   It has to be something big to do this and whatever it is, it  better bring volume with it.   The reason it has to be big is we've been stuck in this range all of 2008 (12000-12800).   A top of a range like this should not go down so easy.

It was an uneventful day despite a follow through of the rally as we had pretty well emptied our bench before the Eco Data.   Better safe than sorry.    Even though we had started guessing and noted here the Eco data might be being priced in after the Feb 15th trading action, we still can't be sure what side of the bed the markets will wake up on and in what mood. (Mr. Market is really Mrs. Market these days;).    Still, a few names off DJIM that did not hit recent highs on Monday played some Tuesday.  JLL, its big chart was updated by BT the night before showing its potential set up to a new highs since earnings, not a NCH like the others and JRCC, the cheap coal hit an intraday new high as well.  ROH is one we started to watch closely Tuesday based on chart.  We did add AKS today, a metal to trade as long as this sector keeps rolling.    The Agri-chemical, most notably the POT-MOS put in a two day H&S pattern and if we are to pullback in the market, we'd look to short to some of these for a flip.    Simply, the market showed this higher inflation data (PPI) is a laggard at this point.  We already know the state of things, the idea of recession.   This only seemed to surprise the shorts who can't understand why the market goes up on bad eco news.  We all get trapped into one way of thinking ..long or short and its a hard habit to break when the same things work over over for you.  You gotta be open minded and think outside the box.

Oh yeah...it's Shanghai surprise anniversary ..lets hope Bernanke doesn't give us one when he begins to testify at 10am.