In the final hours or even minutes of 2010 trading the bulls proved one more time who was really in power last year:

so ALWAYS be wary of a move that consists of capitulations....i.e take what it gives you.... but be aware of what may be taken back....

Nice charts, guys. Yeah, roofer, I have essentially zero doubt this capitulation move will be retraced, either mostly or likely fully. If they were going to have trouble and fall short, I'd expect it to happen right in here. I don't think the bulls are ready to give up yet, not by a long shot. Your question on the financials is key.

Hmmm, one of my favorite analysts, Laszlo Birinyi, mostly because he is so good, accurate, and unbiased, said he sees the S&P at 2,854 in just a few years. Cool. I agree that this is one of the most solid, fundamentally driven, truly based on underlying conditions and valuations bull market in history. The only thing I disagree with is how conservative he is in his estimate.

You can also check out these two articles:

http://www.zerohedge.com/article/smithers-co-finds-sp-now-over-70-overpriced-based-cape-and-q

http://theautomaticearth.blogspot.com/2011/01/january-1-2011-us-housing-story-of-2011.html

The second article is better posted in the economic section (don't worry, I won't start posting those in the trading section in here), but a quick skim on that one for the traders will convey the point, especially after reading the first one.

A bear. A bear! The first and only bear call on the year! From Morgan Stanley, too. Is this someone jumping on the bandwagon now that we have a little selling and talk about a Jan 3 top? Anyway, his call? S&P 1238! Wow, down 20 whole points from today's low. What's he figure, it goes up 100-200, and then comes back in to 1238 to close the year, before ramping up to Laszlo's numbers?

Originally posted by jimkane

...The only thing I disagree with is how conservative he is in his estimate...

That spot sure stopped it dead. But, no selling at all so far. We'll see, but I rather suspect it will be one of those 'stop it dead while it consolidates before it blasts over kind' of things we have seen endlessly on this ramp up. Hopefully it will decide to sell instead. That would be a notable behavior change, too.

Originally posted by jimkane

...If they were going to have trouble and fall short, I'd expect it to happen right in here...

Just as I post that, it 'breaks to the downside'. Watch to see if that is the sell stop sweep, followed by that ramp to the upside. If not, that's a big clue.

I'm glad some readers don't need me to use the 'sarcasm off' button...

Originally posted by jarek

Originally posted by jimkane

...The only thing I disagree with is how conservative he is in his estimate...

Get ready, in case, for that upside explosion.

Originally posted by jimkane

Just as I post that, it 'breaks to the downside'. Watch to see if that is the sell stop sweep, followed by that ramp to the upside. If not, that's a big clue.

In case anyone thinks this market isn't totally and utterly broken:

http://www.zerohedge.com/article/put-call-schizophrenia-three-month-high-followed-three-month-low-never-seen-event

Thanks again - this is very valuable information for me