As I have been saying here, the HFT Bots and Big Bank Algos will take SPY in the range of $ 130 - $ 132 by this Friday 17th June, 2011, the “Risk” trade is on today. It is in perfect sync. with Euro. See the chart below:
The Euro is on the right hand side and S&P 500 is on the left hand. S&P is the red line and Euro are the candle sticks
The futures were up 15 handles before the ordinary investors could participate in the rally. That is how they game the system people. Now the lemmings will follow the pied piper and pile on to the long side. If you remember, nothing, absolutely nothing in the economic indicators changed between yesterday and today, except the bull shit economic report from China. Even that was in line with expectation.
However the selling is not yet over and once the option expiration is behind us, we shall again see renewed selling and a lower low will be visited so that all the stop loss points for the bulls are taken out. The idea is to inflict the maximum pain to maximum people.
The market will rally one last time in summer and I shall keep you informed about a good entry point soon.
So do not give much thought to the rally, one way or other. As a trader, we can take short term profits in up move or down move. But as a long term investor, we better keep our cash ready to pile on the short side by fall.