Some Possible Patterns

All of these charts show possible head and shoulders patterns with RSI testing 50. A failure of the RSI likely means a test of the HS neckline...

If overnight futures were to take us down as they did just after they reopened on the TF to below the 612 area for the cash index (RUT) then we may just be waking up to these patterns breaking down on the open. On the other hand, these trend lines themselves may be bounce points, so, if they are not broken we could get our next bounce there.

Again, we should hold the upper trend line on the wedge shown in my previous post and make an attempt up. I think a lot of this depends on what is happening with all that money market cash. If they are done reallocating it then I would say the probability of a significant pullback, if not top are greatly increased.

However, right now anything could happen and a blow off type scenario seems like the most painful way for the market to go...and given this market you can not take that for granted.

In any case, it does not seem like upside in the market is that substantial...and short and sweet would be most welcome.

Money market guarantee by the Fed expires in the next few days

Regarding the bid for treasuries, meaning the persistent bid for them. The money market guarantee is set to expire on Friday. The treasury action may be from people exiting money markets trying to get into "safety"...and it has got to be giving stocks a bid too as we have seen. What do they say?...too many dollars chasing too few opportunities. If that's the case, this is definitely not what real bull market rallies are built on.

The fact must be, that some people feel safer in stocks where they can lose 30% in a giffy, than in money markets where the firm can lie to you and you lose everything.

This is what happens when you play GOD like the fed/treasury have done. The confidence is NOT really there...and as soon as god takes a break, people's true mood comes out...just as Dan has been pointing out.

Notwithstanding all of that, it seems like this could become another problem for the financial system...that much cash departing money markets can not be good. I think the money markets issue also is effecting currencies...

So what's happening to the institutions that used to invest that money?...what happens to their balance sheets?

I wish I had checked this out earlier...this rally would have been much easier to conceptualize.

I smell trouble.

you can see an article about this here.