Presumptions

The Friday before Memorial Day tends to be lackluster with light trading. There is also typically a bit of rally thinking as the market closes down for the holiday.

The market is closed on Monday, and our next alert will be sent Monday in advance of 5/26 opening.

What occurred on 5/21 added to our Dow projections for more downturn, as while the Dow went beyond its 5/8 high, both the OEX and the S&P 500 did not, and that helped lead to the bearish divergence that prompted the downside we expected.

Yesterday, we saw a healthy consolidation, more downside to put a bit of reality out to our happy investors that have seen such run up, and begun to believe it to be well. As we recalculated the Dow after the first hour sell off we saw s1 at 8334.98, and s2 8247.93 By 11.30 a.m. the market had just touched s2. By 2 p.m. it hit s3. Traders that held partials on the OXBRD June420P were rewarded with a 45% rise from prior day close, returning investors over 100% on this put. New signals to the June 385P were available on the gap up and whipsaw as low as 3.40, with sales to 5.00, but most traders didn't enter on this wild swing to start the day, and with futures dramatically down prior to opening, call traders that took entry would have been high risk traders only. All of this occurred as we hit 8207, R3, before rebounding. Just like a clock within our system.


Since 2000 the value of the world stock markets have gone down 37%. Since March ,2009 they've gone up proportionate amounts. Both of these are facts. Both can lead to presumptions.
For example, one could assume in a 9 year period that the markets will again go down 37%, if history repeats itself, or one can assume that the 37% increases over several months in 2009 indicates larger and longer upturn.

This is the same logic as: "If we close Gitmo where will we put these dangerous prisoners?" Hmm, considering Gitmo is 90 miles from the U.S., and on soil with a country we currently are on a ridiculous embargo with, it is illogical to even consider that the U.S. could not find a place to house dangerous prisoners, yet we have some that actually create FEAR in our gullible people, and question our ability.
It is this kind of mis-information in which we often build our facts. I use it as we consider just a week ago as the market analysts were seriously explaining to us the strength of the market.

When you find nothing it means you've eliminated what surrounds the something. Learn to watch the market breathe.