The late August/ early-September theme initiated by Jackson Hole, better macro data, a sentiment shift carried into Friday's rally as FOMC-J'Hole vibrations, v. good macro- durable orders,  Euro countertrend rally from 1.27-1.28 persisted to a better to buy market sentiment once again!.   Nothing has changed as to why the market keeps rolling along, the writing was on the wall started about 100SPX points lower and DJIM has maintained the better to buy market premise all of September.   

The "Whatever Pt I, II"…back filling, consolidation argument here for the previous 3 negative days caught shorts off guard once for a second time last week with a gap open erasing the Thursday sell off...."Shorts are biased to be short term now and longs will buy up dips, so a quick rebound move is very possible in a catalyst free and Q end environment.."     As discussed, the market had no legitimate reason to sell off hard Thursday afternoon other than shorts pressing a little too aggressively at a 2nd visit to SPX1130.   

Well, them`shorts got burned as Germany IFO (consumer)  surged putting to rest quickly the previous days European fear mongering…"..exaggerated and un-called downside open off Euro PMI data and Initial claims here.  Smart money knows Europe`s data growth will now slowdown in the footsteps of the way China and US did (while now these stabilize).    Recession fear mongering today surrounding Europe is just what we went through for a few months with double dip talk in the US as our ISM`s came in weaker than expected after peaking"

So, what now?....It seems expectations (even Bears) is to have one of the usual Monday buying spree's by managers and for the rally to continue.   Seemingly, if you add on the 'Q end' dressing theory, we may have another 3 days of this rally is probably the consensus.   But, the idea here is managers (MF/pensions) are still not in the 'equity' market and won't be coming until Gold  at least hit’s a roadblock.   The money flow is and has been into ETF's as we`ve pointed out, so individual equities are an after thought as it's mostly a HF game right now.    Last week,  we said the Q end should keep the market steady and not necessarily give a rocket boost.     Also, despite the broad based healthy action on Friday,  a fault can be found that our favorite tradeables were not making NCH's with nice breakouts, but only recovering ticks off the previous 3 day dip.   Maybe nit-picking, but the Shadowlist is a better indication many times.     Also, the commodity linked equity shadowlisted favorites really need to show up to reflate the FOMC inflation trade.     Also,  the market is coming up to a cluster of `R`  in the 1054-1062 range.   Is it worth to chase one of the best months in decades for an extra 10-15 SPX points at this point??…that's a question you should ask ahead of a focus change as we get into earnings season.    We've highlighted on a chart here off and on of the April-August DT line and August DT that once were busted...the market rallied.   Well, we have a big one coming up not discussed from what we've seen.   You have to look back to dreaded Oct `07 top down trendline lined up to this April DT top....lining up to 1062SPX now.    For some reason, mostly psychological, it seems like a pivotal place considering what the market has been through the last 36 months!.    These are some of things going through this traders mind in contemplating what to do.    Best thing is watch the DJIM composite of about 40 stocks divided by sectors and be selective in pursing a trade in a few that are worthy away from all the media/ blogshere noise.