Stay Groovy

"It was an expression used by small recon units and sniper teams in hostile terrain in Vietnam. They would tell one another to stay groovy when the danger level was so insanely high they popped amphetamines to stay awake and ready to rock twenty-four/ seven, because anything less would get them all killed. Stay groovy; take your pill. Stay groovy; safety off, finger on. Stay groovy; welcome to hell."

 The Watchman, Robert Crais

Did we break out of the channel yesterday?  I thought so, but took a fresh look last night and, well, see for yourself...

It all comes down to whether you draw off the open/close or the highs/lows.  Which is right?  In general, we use open/close prices for longer term trends and high/low prices for shorter term.  Although, everyone has their own definitions of long and short term.

As discussed yesterday, I am still looking for a retreat to the 1330-1332 level before we can advance any more.  Yesterday's little dip was close, but didn't really do it for me.  The flash back up in the waning minutes was also suspect.

If we are to advance in another wave up, I would still want to see a proper corrective wave with some definition.  In the meantime, we should close down today.  As mentioned yesterday, we haven't had 5 up days in a row since the Feb 18 top.

There are plenty of tripwires ahead in the economic data due out this week.  Will they blow up the market, or simply result in another QE airstrike?   May as well call your bookie and bet on whether QE3 is coming.  I'm presently on the sidelines, as I don't have enough conviction about the next few days to take a position either way.

While I think there's some upside potentially to the 1380 level, I wouldn't bet the farm -- especially from these levels.  I remain much more concerned about the downside.  Stay groovy.