Squeeze lurks..

All the hoopla surrounding the significance of the 700 SPX level proved to be of little consequence for today at least.   Those anticipating a big rush down will likely be disappointed here.  In our view, the significant level was the break of 750 and follow up blood bath.   As this 700 fear dissipates, we feel the market should start to reverse as the door is almost wide open following the introduction of the TALF and some whispers on “Bad Bank’today.   Sooner than later, the market will start to look forward off the significance of the launch barring any new negative headline in the short term.   After all,  this is the last of the details the market has been waiting for and it‘s time to look ahead.   Basically,  when the shorts feel this market will not go straight to 650,  they will begin to take profits and their buying will lead to more buying from the other side.    As far as today,  we had hoped the TALF launch plan would have a better reaction,  maybe all the spectacles in Washington (Bernanke, Geithner) diffused the potential today for a starter move as they got all the air time.   All we got was a couple of feeble moves without a lot of support as financials didn’t participate.

 
Right now, the best newsflow continues to be from tech following GS conference last week (MS this week), today wireless stocks ALTR/XLNX both said China infrastructure builds were responsible for their upside numbers.  Hopefully, we can find some leadership from this group, a move involving all the major SPX groups at the same time lurks.  The premise here is for a nice short squeeze shortly.