"The Adventures 1st, Explanations Take Such A Dreadful Time"

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Lewis Carroll, Alice's Adventures in Wonderland & Through the Looking-Glass

Hi all. Coming to you live from the bubble. And if I may, like Alice Through the Technical Looking Glass, the indices told me a story I will now share with you.

Beginning with NASDAQ or QQQs, although they broke Friday’s low of 101.07 intraday, they held the runaway gap, although admittedly less enthusiastically. More importantly, they closed above Friday’s low making Tuesday’s session more digestion unless QQQs break 100.56.

The S&P 500, also broke Friday’s low intraday, held the gap from October 31st, and closed back above Friday’s low. It now has 3 doji days or 3 shooting stars, which I find really exciting as a clear technical signal whichever way it breaks.

The Russell 2000s, had the weakest day (for a change), filled the gap form October 31st, but hurrah, and could not close above Friday’s low at 115.88. (115.80)

Finally, the Dow continues to live a life of its own, closing green and defending its new high status. Furthermore, it eked out an Accumulation day in Volume-green close, volume better than the day prior.

Speaking of volume, looking at the world of blow-off volume patterns, must note that gold closed green which is positive, but needs another indicator to prove itself as a bottom. A gap above the last 3 session’s prices would be a step in the right direction towards an island bottom. For my money, that would be the most powerful and convincing pattern to see.

With oil, (USO), volume was equally spectacular on Tuesday as it was on Monday, making this also noteworthy for perhaps an island bottom.

Either GLD or USO or dare I say both setting up for bottoms, could be the tea at the Mad Hatter’s tea party! Otherwise, it’s “Off with their heads!”

“Contrariwise,' continued Tweedledee, 'if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic.”
Lewis Carroll, Alice's Adventures in Wonderland & Through the Looking-Glass

S&P 500 (SPY) 3 shooting stars which means buy over the highs and at the very least keep away from longs under Tuesday’s lows

Russell 2000 (IWM) Broke Friday’s low yet continues to hold 115.70 for now

Dow (DIA) Over 173.90 hard to argue with but under Tuesday’s low will be sobering

Nasdaq (QQQ) Held where it needed to. Wednesday should let us know if it fails the runaway gap or blows to new highs

XLF (Financials) If that was a correction, seems this has more upside to go

KRE (Regional Banks) I’m thinking Tuesday’s correction might have been a gift.

SMH (Semiconductors) Paused-over 52.00 should continue

IYT (Transportation) This did make new highs then sold off but closed green-not easy if looking for the scalp-better if willing to sit against 155.90

XRT (Retail) 88.00 a swing level of support which interestingly enough, it closed just on the nose of

IYR (Real Estate) As long as rates stay low, this looks good

ITB (US Home Construction) Sharing a room with IWM or maybe a hospital bed

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 120 pivotal unless this begins to break further below 117.68