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The bullish push back up from last week's damage continues. At this point, I could go one of two ways. One way is to say that the recovery is over and that we're about to re-enter another bearish leg. Another way is to say there are still several hundred Dow points to go before we re-enter such a leg. Apparently tomorrow morning's economic reports are going to have a lot to do with this.

As for today, the Dow was firm most of the day, but just as with yesterday, it gave up some steam near the end.

The thing is, at this point, just about any chart could be subjected to completely valid bullish or bearish arguments. So just to keep everyone confused, I'm going to show you a few index charts and say one or two bullish and bearish things about each one. First, here's the Russell 2000 on a daily basis:

Bullish Conclusions: There's free sailing until $795 before two simultaneous Fib retracements are reached. And there is a huge amount of room between the current price levels and the underside of that major trendline that was broken - - up to about $810.

Bearish Conclusions: The stock bounced perfectly off its 38.2% retracement today. It showed a lot of strength but couldn't keep it up. It's a nice shooting star pattern (albeit in the middle of a chart).

Now here is the same index on a minute bar basis:

Bullish Conclusions: Largely the same as above. You can see the Fib lines more clearly.

Bearish Conclusions: The astonishing thing to me is how perfectly it obeyed the Fib. The 38.2% retracement level is at 786.78. The high today was 786.75. That's only 00.03 points! Absolutely amazing!

Here is the S&P 500 on a minute bar basis:

Bullish Conclusions: See that blue line just beneath the current prices? That's a pretty major supporting line. If we rally tomorrow, that line is going to hold strong as major support for a while.

Bearish Conclusions: This also bounced right off the 38.2% retracement.

And here is the same index with daily bars:

Bullish Conclusions: This offers a better view of that huge trendline that used to be resistance but is now support.

Bearish Conclusions: That same line was penetrated, albeit just a little bit, and there is a huge empty space beneath the line representing how far this sucker could fall.

As for the $VIX, I feel pretty good about how much it has fallen. When it was about 20, I made a mental note that it should get down to about 13 to get the hot air out. It has done so. If today is another strong up today, this could lose a couple more points.

AMLN looks like it's close to breaking its huge topping pattern.

Chicago Mercantile (CME) was up a bit today, so my puts suffered some, but I still love this chart. Satan himself continues to speak through this blog - note the eerie point change today.

And what can you say about a stock like Google which actually falls on such a strong up day. Something tells me the leadership days of this stock are a thing of the past.

Tomorrow should be the most interesting day of the week. Let's hope it's interesting in a good way. See you then.

I made a remark (shortly before last Tuesday's huge drop) that I was starting to feel good about the market again. I believe that even more strongly now. This market is actually starting to make sense again. And act rationally. And predictably (to a degree). Maybe some sanity is coming back.

I was also gratified to see that someone finally posted the first review on Amazon of my book

. Those of you who have purchased it, please do the same!

Today's market reminds me of the contrast between fantasy and reality. See, the market people were all swept up with (until quite recently) looked a lot like this:

But the market I see (and, believe it or not, it's the exact same person in the photo above and below) is something I try to view with clearer eyes and a more logical mind:

The market is older, more tired, and more dangerous than the glossy photo shoots on CNBC might make you believe.

I continue to be fascinating by the NZD/USD trade. I don't think I've ever seen a market bounce off Fib retracements this predictably. It is incredible! Continued weakness here can only be good for U.S. stock bears.

The behavior of the Dow recently has been fascinating. (1) shows the point where the market was bottoming out and beginning to get the confidence to turn back up. At (2) it completes a beautiful saucer pattern, and it accelerates to (3). The market begins softening, which causes short-term worry, but then it regains its strength and zooms to (4). Now the bulls are starting to feel really good. But the drop from point (4) to point (5) is what this market is all about.......dashed hopes.......and, to me, is a strong sign that we may be headed for more marvelous weakness.

Here's a short term chart of my favorite index short, the Russell 2000. I don't know why the bid/ask spreads on this, a much more thinly traded option, are so much more reasonable than the gigantic S&P options, whose bid/ask is a complete rip-off. In any case, the horizontal line at 782 is my stop loss point.

A longer term view of the same index reveals the many Fib retracements I've laid down.

Now for a few short picks. Bank of America (BAC) seems to have exhausted its recovery.

Continental Airlines (CAL) is right at the cusp of a full blown breakdown.

I am madly in love with my CME puts right now. This stock looks so juicy you can just about cut it with a steak knife.

I haven't touched Google (GOOG) in ages, but I picked up some puts today.

MWP looks like a good short play on a hyperbolic stock.

And Reynolds (RAI) is a very clear toppy pattern.

I read the big economic news isn't until Friday morning. In spite of that, both Thursday and Friday are bound to be fascinating! See you again soon.........

OK, it's one of these again.....those times where I'm about to get on a plane,l but I feel a huge obligation to post something so it isn't too late!

Yesterday morning I wrote to say that a big bounce was bound to come soon. The market decided to freak everyone out yesterday instead, just to get rid of the remaining weak hands. Today the market ratcheted up in earnest.

I have a few graphs that support the idea that we're in for another leg down, but I'm not putting too much money on that notion. I bought a medium sized block of Russell 2000 puts near the high today.

But I could easily be convinced that it takes more than one day's rally to flush the bullishness out of the system. The market could absolutely head another 400 Dow points higher from here.

It's nice that the $VIX lost about 40% of its massive rise lately. That makes puts a little more reasonable. And I was happy to see a good, healthy triple-point rise in the Dow. But no promises!

They're yelling at me to get on board. Thanks for swinging by!