Second hand, house flops a two pair

The market has rallied higher Tuesday, and I fully expect a gap up Wednesday. At this point I see the market hitting close to the "upper right shoulder" of the market pattern. The real fight will be Thursday, when Google reports after hours. Friday may be the parabolic blowoff I stated I am looking for to buy puts for the next month.

The VIX is pushing lower, making long term puts even more attractive. The next downswing, whenever it happens, will be more severe with all this game playing.

Let's take a look at the chart. I said it Monday, this week will be no fun. I am bleeding from every short right now. If you read this blog and have only a little short, Friday may be the great risk to reward to add to positions. However it IS possible (although I think unlikely) the market rallies hard to much higher levels.

How? Well Obama is pushing for a bill to automatically have employers deduct from employee's payroll to invest in the market through IRA's in smaller companies. If this passes it could be the market moves to a much higher level than the head and shoulders pattern.

In any event, my favorite pastime the last few months, lets look at the charts. If SPX closes above 915, I will start getting very concerned that I am dead wrong about this move.

From WebSurfinMurf's Financial Blog

From WebSurfinMurf's Financial Blog