The magnet of 1200....

There is really not a whole lot of reasons why this market should go up this much today as there was not a whole lot of reasons the market went down that much the trading day before.  It seems whenever there is a ’bunch’ of possible catalysts (not one real catalyst) leading to a move up or down, the next day is usually a reversal of that move.  So, today’s short covering move is taken with a grain of salt as we did not close above 1205-SPX.   All of the catalysts we've seen and discussed that caused this market to gyrate around 1200 may simply be the fact that we are due for some solid consolidation around this 1200 level, even if seemingly it comes with some volatility day to day now.

Fundamentals may support higher levels down the road, but it may not mean that this market should get there right now.    Out there, we seem to have a lot of crosscurrent headlines that can impact a trader's emotion, but otherwise it's really business as usual, in our opinion.     Many tech, financials stocks led the rebound today and many commodity stocks lagged behind due to China RRR hike and Aussie mining tax.    On another day, the role can simply be reversed.    The last thing we want to do here, is trying to over analyze every mini move of every sector and interpret into something irrelevant.     After all, many of these sectors have had a strong run up since the beginning of the year and we are getting close to the period where action would eventually slow down.    Consolidation among some sectors is fine and rotation into some other sectors to play catch up is just as good.    We just have to understand what has gotten us to this point at first place, and that is the Economic recovery and today‘s global PMI‘s/ ISM were strong pointing in that direction.     The Greece bailout, the Oil spill, the GS investigation, the financial reform and many other events we are going to be facing down the road, do not really affect the reason we buy into this stock market day to day.

Bottom line, it seems that there's quit bit of position juggling out there on a daily basis.   It's also perfectly understandable some people are comfortable holding their positions and aren‘t chasing further just yet.    For us, we simply have to spot the strongest plays and keep trading until the play tires itself out.