This is a Resilient Market, But We Do Not Trust It

The Friday before Mother's Day the Dow was up 9 of the last 13 years. This is an historical fact. And, now I'll tell why I'm bearish. We've made great money on a series of calls, over 17 profitable trades now, with one stop loss coming on an open May410P. I bought this position because I saw 8350 as a top, and did not think our optimism could take 65 billion in additional stress test financing without teetering.

Puts finally began to show a bit of reality to the market yesterday, after hitting top tests again. This is a resilient market, but we do not trust it.

Jung proved me wrong. Carl Jung, the great Swiss psychiatrist, believed the stock market represents our "collective subconscious". Thusly, if we have a "pent up demand for optimism" based on an overreaction of too much fear after too much greed, it's easier to see the meteoric rise we've had.

The charts reflect the S &P 500, and at 925 I certainly see resistance. The standard chart shows a bearish rising wedge.

Watching the Dow, as we re-project each day, I see support and resistance lines coming together, another sign of a topping.

Lastly, happy as I am to take the many profits we've had with calls, this is too good to be true. Simply know that.

Yesterday we saw a market open to highs of 8617, allowing only tight fast profits for day traders on the May 425C, but allowed traders to enter on the May410 P as a new buy as low as 1.85 and sell to 4.50.

This all occurred prior to 3 p.m. EST. I've recently been writing summary before the final hour on purpose, to see how much the final hour affects trading, and if the electronic trading format is shifting the trading cycles to 9. 30 a.m. to 10.30 am. and 3.00 p.m. to 4.15 P.M.

I reworked the Dow projections at 10.30 a.m. yesterday with the moves in the market, and it was helpful to trade the May 410P as the market hit the pivot point, and progressed to near S2 before retreating. This allowed profits of up to 2.65 a contract, simply following support and resistance lines recalculated to the morning opening.

Trader MP, Advanced Mentoring, reports:

"Hey Floyd.....

I went with the 420 put instead of the the 410 from the alert...it was a bit less OTM

Bought this morning when the DOW was up 50 pts. at 8500 level...I bought ten contracts at 3.80....

Sold when the DOW hit your projected bottom of 8376 EXACTLY!!...sold for 8.30...

That is a $4500 profit in one day!!!

Can you imagine if I bought 20 contracts?

Is that how one becomes a millionaire trading the OEX?"