Lull them to sleep and attack…

That’s exactly what the market is doing to the Bears as it’s grinding them into one big fur ball!.  First, they moan and groan in disbelieve of the latest closing manipulative buying,  now it’s the so-called boring market closing exactly at where it was last Thursday at SPX 842.    What they really should complain about is that their comrades don’t have the cajones to press fresh positions and try to push this market lower when the opportunity arises as its done a few times in the past week.   This is the " upside risk",  we have been talking for months now in the premise of this markets health and they are simply afraid of it.    What happens is the Bulls have it easy to reverse the market as seen by buy late buying and also lull them to sleep before attacking 850 in this case with a little help from our overseas allies.   An attack from the rear is likely coming!.   Simply,  the Bulls army is entrenched and the Bears are on their heels.   After 2+ months of a blitzkrieg rally on the Bears/ shorts, a directionless and worn out group lies in wait.   Their continous short-sightedness over the past few months can be linked to many a fallen “General”.   The beauty of trading is the correlation to almost anything in life, including war!.  Trading strategy deals with time, force, distance, the same as in war.   If you don’t use the ‘ psychological’ aspect to trading,  you won’t know WTF is going on and will be at lost as the many novice or wannabe traders we see get hooked by the mentality or lack of,  in some forum-chat like blogs.   Their minds clogged as they learn to read the markets by ones self absorbing hosting ‘gurus’ ways/views.. technical, political, whatever and not getting anywhere ..educationally or financially.

We know our day in the sun (40% rally) will eventually concede this summer as we go back to pre 2007 summer trading days with liquidity drying up., but until a clear signal, we march on like Bulltroopers!.  What we see now with low volume is a sign of these dog days of summer returning.   Many a hedgie, many a retail will most likely take it easy this summer and hold on to the gains of this rally until we truly correct.     Actually,  we feel slow trading in the broad tape will be a sign of stability and rationality coming back as we come to an economic trough, recession end.   A sign of confidence.   In no way do the slow, grinding indices like today mean you can’t money this summer.   It actually might be better as traders flock to what’s working, a sector, a group because that’s where the action will be!.   What’s likely to continue and probably pick up is ‘selective stock/ sector’ picking, we said was the way to go back in late March after Treasury news.    Major ETF trading will continue to go down % wise.  Today’s is a primo example as we’ve been talking about the ‘steels’ since the BHP deal a few days back.  Since that Alert,  CLF  and now X  have been given upgrades as the firms come to analyze the deal and it’s potential for US ‘steel companies’ down the road.  X +8%,CLF +6%, AKS +9%, RS +10%, SCHN + 7% .  

So,  while the 4 horsemen (RIMM etc…) slept today, while the Banks-brokers TARP was somewhat sell the news in an orderly manner,  we still had an underground market in Steels leading by hand other commods’ with the USD weakness. 

Charge...!!!