Today’s late day melt up doesn’t really change anything in the big picture. The market was due to bounce technically when you look at the fibonacci retracement levels as we haven’t had much of a bounce at all since Monday’s top. I covered my shorts almost at the days low when it had a double bottom pattern put in, although I didn’t expect the market to rally that hard going into the close. Funny think I noticed about myself is that I really didn’t want to close them out. I actually paused right before I hit the buy to cover button because I wanted to wait and see if the market fell more. Then I decided that I’m testing a few strategies out I’d better take my profits while I have them and boy am I glad I did.

The overlay is XLF (Purple dotted line) and it’s very weak relative to the Dow, which isn’t good for the bulls. As you can see the Dow rallied right up to it’s 38.2% line and given that it rallied almost 250 points in less than an hour I expect these gains to evaporate very quickly as the 15min chart is showing a bearish pattern as well. At the close I entered back into DIA & AAP short and will add on any strength in the a.m.