Welcome To The Twilight Zone

11:06am EDT: That was a nice orderly walk-down in the tape this morning:

And once again it was nothing but a dip buying opportunity for the bulltarts. Ladies and leeches – we are far from breaching the lower border of this channel – any drops in the tape are condoned and not forced – there’s a key difference here which is easily observable on the Zero Lite. Which btw has gone completely flat since Friday afternoon – very strange – but we’ve been fooled before, so I won’t read too much into it.

My apologies if I sound a bit despondent here – it’s just that I am getting very tired of watching tape that is unfolding in a completely unnatural fashion, in that it is driven solely by program and high frequency trading.

Gravity has effectively been banned – we have now crossed over into the Twilight Zone and the laws of physics do not apply anymore. Capitulation? I should be so lucky! My August puts are pretty much worthless at this point, so even selling them is not going to make much of a difference. At this point I’m mostly watching for entertainment value – and trust me – it’s not that entertaining.

11:55am EDT: I would like to respond to Tim Knight’s post over at the Slope:

This is the 1929 crash – observe how the A leg is very steep and then we see a grinding two year drop to the downside.

This is the 2000 crash – as most of you know by now, my assumption is that the 2003-2007 ‘bull market’ was nothing but a cycle degree B wave as part of a super cycle degree secular bear market. Note how the cycle a wave between 2003 and 2007 was less steep than what we have been experiencing in the current cycle c leg – on the downside and upside I might add.

This looks like an unfolding flat correction to me, therefore I do not expect a slow degradation in the coming months. On the contrary, once we peak around SPX 1050 (or whatever) I expect things to accelerate to the downside in a very nasty fashion. This also supports the current trading environment we are dealing with, which is mainly supported by program trading bots playing ping pong with each other. They have been relentless in driving this turd to the upside, and it’s reasonable assume they’ll do the same once they switch into ‘sell mode’.

Well, that’s my story, and I’m sticking with it.

1:32pm EDT: Perhaps this could be the reason for the lack of trading volume/participation today. Of course on Shapiro’s end it will cause nothing but a smirk and a complacent yawn.

1:44pm EDT: Hat tip to T.K.:

I would still love to see a response to my counter perspective, Tim 😉