How Fast Sentiment Changes

The week after triple witching the Dow was down 15 of the last 21 years, but had strong up moves in 2000 and 2007. Facts help us see patterns.

Monday's moves on the Geitner package sent the S&P 500 above 800, a strong resistance line, and took the Dow right back to the what were the former lows of the market, now considered euphoria for us all.

The Dow hit tops of 7723 by 3 p.m., with a 5.53% increase for the day. Wall Street liked what they heard.

Traders that played the call had to break all our rules, however, as the market opened with a huge exhaustive gap. Those traders that did play it up had up to 82% returns.

So, is there more upside? Perhaps. The next tops could run at 7750 to 7900, and with euphoria, anything is possible. And by day end yesterday we hit 7820. 7950 is the next resistance line.

Will, however, Main Street and the mood of the news take us with a backstep, and a larger consolidation? It's highly likely.

We will list two signals, our open put, which we used for a hedge with the many profits last week, and a recommendation for an OTM call, for the optimists that think more upside could occur.

And remember again, at 7750, where the market hit tops at 3.45 p.m., we hit the October bottoms that we all thought was the end of the world:) Perspectives change.

Whew. How fast sentiment changes.

And, by the way, small cars aren't selling. America doesn't want them. Gas is low. Why bother? (Check the statistics) As usual, we look forward without vision of past or future.