Snow White and the SEVEN Dwarfs

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The Russell 2000s completed its 8th day consolidating in a tight range on low volume leading many traders (myself included) to ponder what this tight trading range with obvious lack of volatility means going forward.

Seven theories come to mind:
1. Time, not price as a legitimate way to work off overbought conditions.
2. Although bullish sentiment has increased, the euphoria has waned and many players remain sidelined. This supports my favorite volume signal we have yet to see-a blow off top scenario.
3. A Federal Holiday and little in the way of fresh economic data to start this week-folks are waiting.
4. The scare tactics from permabears, Doomsday Sayers coupled with traders who aren’t long enough rationalizing this more as a false rally, all have been collectively successful in keeping new money out of the market.
5. The early start of a general lack of fresh participation ahead of the holidays. Hey, if stores can advertise earlier and earlier, investors can even up earlier as well.
6. A confusing and real lack of leadership in the high momentum stocks along with an anemic advanced/declined indicator, not to mention concerns on a market running rich.
7. Falling oil, gas and metals prices leading to fears of deflation. (Actually, all look better with possible bottoming formations developing).

And perhaps the best reason of all- Analysts like me have too much time to put way too much thought into this. It could all mean absolutely nothing except, new rules during a year when a whole bunch of new rules emerged. Take the market at face value.

Note: If you want to totally blow your mind, google the number 7. From mathematical to classical to food, media, games, literature, music, sports, places and religions, not to mention the Seven Theories of Catastrophe (math and science), the number 7 is all that!

S&P 500 (SPY) Oxygen tanks anyone?

Russell 2000 (IWM) Over 117.80 brings it to the Promised Land and has to hold 115.80

Dow (DIA) Overbought but no topping patterns yet

Nasdaq (QQQ) With the help of AAPL and a few others-BIDU, LNKD, this finally made new highs

XLF (Financials) New high and some slight possibility of a reversal candle-of course, needs confirmation

KRE (Regional Banks) Inside day-40.43 pivotal

SMH (Semiconductors) Semis are not needed at this party, but, still like to see them clear 52.00

IBB (Biotechnology) Good day if holds 293.50 level

XRT (Retail) 2 inside days-sweet place to look for follow through

IYR (Real Estate) 75.00 big support

ITB (US Home Construction) Wrote about this so hope you all jumped in-now a bit of resistance

GLD (Gold Trust) Won’t say reversal, but will say possible over 113.15-espeically if gaps above

USO (US Oil Fund) 30.00 key point to clear if going to hold

XLE (Energy) 86.25 key support with 88.90 the 50 DMA to clear

XOP (Oil and Gas Exploration) Over 62.00 different picture

FCG (First Trust ISE Reserve NatGas) Over 16.00 much better

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal area and the 50 DMA to hold 117.75