The weekly charts look solid to the long side as I remarked in my weekend note.  But I’m seeing bearish patterns all over the place now on the dailies.  Some great trends in retail are busted, namely $URBN $TUP and $JCG, they are all rolling over and look awful.  Materials look ugly as I’m having monster bricks of gold stuffed down my throat this morning in the form of $RBY $IAG $EGO and a little bit of silver mixed in with $HL.  Tech doesn’t look all that awful, the tape looks worse than the individual components.

This whole rally has been about turning bearish patterns bullish and squeezing the masochistic short sellers.  If it doesn’t happen this time you better think long and hard about what that means for the market, I know I will.  I still believe the long term trend line setups will work, like the one I posted this morning in $HITK, if they fail, watch out below.  I’m at 7% cash in the momentum book, and I’ll look to add some more materials exposure if they continue to take a whooping over the next few days.  The grains market is getting blown out of the water, so don’t go anywhere near the agg stocks, bu think you can buy the dip in the miners and maybe, maybe, maybe even the industrial metals producers like $TIE.

Stay nimble, three of the past 6 have been distribution days, the 115 $SPY level is obviously one that big players are selling into.  Remember that you can sell at any time and move to cash, but the biggest guys can only do it over time, that is your advantage.