Testy Tuesday – 2,180 and Bust?

Big push or last gasp?  

2,200 is the top of our likely range at the moment and it's just 20 points away on the S&P and that's 400 points higher (22%) than we were in February and, according to our 5% Rule™, a 20% move up with a 2% overshoot is very likely to lead to a 4% pullback to about 2,120 before we'll see anything higher.

The volume gets lower and lower while the market climbs higher and higher and that's exactly the sort of thing Willie Wonka says just before something horrible happens.  I'm just saying…

We're having lots of fun scalping profits intra-day but we still have a generally bearish stance.  This morning, in our Live Member Chat Room, we already had a nice $250 per contract winner on the oil dip from $43.25 to $43 and now (8:15) we're back at $43.25 and, you know what?  We can do it again!  That's the nice thing about fake market moves – you can bet against them over and over.  

I was over at the Nasdaq yesterday discussing my broad market outlook on FaceBook Live, so you can watch that and save us the trouble of going over it again.  Needless to say we're still using yesterday's shorting lines on the Futures as, much like oil – they made great money yesterday and they can make great money again today as the market bucks like a bronco, trying to toss off the bears before it gets too tired to fight the gravity.

Remember, I can only tell you what the market is going to do and how to make money trading it – the rest is up to you!  

We did pick up a long this morning in the Futures and that's an old favorite as well.  It's good not to have all your bets in the same direction but our conviction trade is the oil (/CL) short – that's a melt-down waiting to happen (also outlined in yesterday's post).  Gasoline (/RB) is already well off the highs of $1.39, back to $1.36 and that would put oil back at
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