Thrill Ride Thursday – 1,700 and Bust?

Clack, clack, clack, like a roller coaster heading up the tracks, the market ticks higher every morning in the futures and, most of the time lately, we then sell off once the real session opens up.  As you can see from Dave Fry's chart, we had a wild session yesterday with a huge open, a big dip, a sharp recovery and a bigger dip – wheeeeee!!!!  

This morning, we're back up again, almost back to yesterday's highs as we wait for Draghi (7:45) and the ECB to give us a hint of MORE FREE MONEY.  Just like the hints they gave us at the last 3 meetings.  There's still no actual money but, as long as we believe really hard, we can still act like it's coming.  

Acting is a good way to sum up this mornings PMI reports out of China.  I'm not going to get into it again as we already tweeted out that commentary from the morning Member Chat but, suffice to say it was fake, Fake, FAKE!  

One interesting mixed signal we're getting this morning is a sharp rise in Bond-buying, indicated by TLT shooting up from 105.76 to 107.75 since last night.  That's not what you expect to see if the market is rallying.  

Still, if we do get over that 1,700 line on the S&P, we need to switch off our brains and go long, long, long until that line fails us again.  More likely, we form an "M" pattern as we're rejected here and the S&P falls back to 1,600, which would be a nice, HEALTHY 5% correction (5.8% to be exact).  If we can consolidate between 1,600 and 1,700 between now and next earnings – I will be able to get much more bullish as we fill in that huge air pocket we have…