Still in a Topping Formation

Fridays quick move down based on oil and the jobs report is another confirmation of the importance of the 1437 bounce high a few weeks ago.  It does however, not necessarily point to further sharp declines immediately.  Volume on the ups and downs has not been great for a long time as there is more talking poistions than position taking.  The bulls are still looking for cinderella to come back and the bears are waiting for the other shoe to drop.  This leads to a lot of inaction as bulls want to get a really cheap buy and the bears want to sell more higher.

It might be interesting to take a look at our background material on the main site as it pertains to bubbles.  We point out there that the last bubble would be the commodity bubble in the whole bubble series and it would take higher interest rates to end it.  We are not close to that endgame yet.  It is however, interesting that another piece of the commodity bubble is falling in place as the NY Times pointed out in a story last week, hedge funds are buying agricultural infrastructure, ie in one deal Cargill sold some 98 grain elevators to a hedge fund.  Cargill does not make too many bad trades.

So from a trader standpoint, we see a high probability of a tight trading range this week on the S&P 500 that will run between 1358 and 1393.  Iran and oil remain the wild card.

7:41 AM CDT 

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