Thursday Evening  12 November 2009

The market continues to show growing weakness, enough to get short at 1091.50 during the day.  Half
the short position was covered at 1087.50 on the close, and the balance is being held going into Friday's
trade.  The reasons are fairly obvious.  Tuesday's small range was a red flag, a note of caution because
buyers were so spent they could not extend the range higher, and at an important point of resistance.

Wednesday turned out to be a failed probe to the upside.  We expressed our view that a new high was
likely, S & P - A Tired, Spent Bull?, from yesterday.  That did occur, but instead of continuing on strength
to the upside, the range was still relatively small, and the close was back under the previous highs from
October.  Not a good sign. 

Right from the start, on Thursday, price opened lower and traded in a small range.  Once that range was
broken to the downside on strong volume and a poor close, we recommended short positions at 1091.5
area.  Half the position was covered near the close for a few reasons.

The late day rally on the close, off the lows, broke a 10 minute intra day channel line from the day's highs. 
The biggest concern remains the lack of new supply coming into the market.  Supply is strong selling, on
increased volume activity that breaks previous support areas.

You can see volume increased slightly over yesterday, but it does not reflect a sharp increase that would
demonstrate that supply was present.  Yes, there was some selling, but buyers were not very strong and
fewer in number, so what selling there was, prevailed.

What we know is that the trend is weak.  The daily trend is sideways, as we have identified previously.
The weekly trend remains up, but depending on where price closes on Friday, that trend has weakened,
as well.

We are going with the prevailing price direction, prompted by the intra day trend, which is down, so we
are in harmony with the trend in the time frame identified.  Because the higher day time frame is only
sideways, there is not a lot of conviction in expectations for a concerted downside effort, at least at this
point in the market structure.

Cautiously short.