Even though the market made a strong rally off the open this morning, there still appears to be plenty of hesitation about holding positions overnight without knowledge of how the Nikkei will trade. There was finally some fear in the air as the VIX opened with a big spike up and seems to have broken out from the recent range of consolidation. Despite the rally, the pattern of lower low is still intact and a number of key support levels have been broken without notable leadership. Yesterday’s high around 103.48 on the SPY would be a big hurdle. We have two big POMO days back to back and continuing oversold condition; a bit of good news can go a long way during option expiration week. On a gut level I am still not impressed with the bears after this 1% drop.
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