On news that the auto bailout was failing the Senate on Thursday night the asian, european, and US futures overnight sessions collapsed in a panic. But immediately at the US cash market open, it was bought up all day to finish positive. The market wants to go higher. As I've shown in prior posts below, the Nasdaqs are leading the way up and down, and right now they point up. Above is a 15min chart of the S&P showing what looks like a 5 wave rally, which tells us that the near term trend is up and further gains will be achieved. The second chart above shows some targeted resistance levels which I will use to close long positions and establish more short positions. You see the resistance levels in the blue horizontal lines which are at 920, 964 and 1008. 1008 is the maximum point this rally can go and I have big doubts it will get even close to that area. Once the market works its way to those resistance levels I will start closing long call option positions and putting on more short positions. The more it rises, the more aggressively short I'll become. This rally over the past few weeks is a correction, which means new lows on the year will be achieved. I'm going to align myself with that event.
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