Want to know the price you pay for a huge rebound on Friday and an even bigger one on Monday? It’s a tepid day like Tuesday, and today’s apparent pullback.

This is the mode we’ve been in for two months now….a strong start, but no follow-through (both bearish and bullish). Were the market able to do anything in moderation, we may actually get something going and keep it going. When you open too strongly though - like we did on Monday - and then keep buying without a second thought, you’re soon going to inspire concerns of being overbought. Welcome to the quagmire.

Since late January, an open above the previous day’s close more often than not has meant a close under the prior day’s close (though sometimes it took two days for the pattern to play out). Likewise, an open under the prior day’s close has usually meant a close above the previous close. Take a look.

In other words, the better bet for the last two months has been selling into a strong move, and buying a good dip. Of course, the trade may only last a day or two, but it’s better than nothing in this wishy-washy environment. Which bring me to today’s point…

Don’t get too enamored with this week’s early strength - I don’t think it’ll last. By Friday I may be saying the exact opposite, but I think Wednesday’s early weakness points to an unwinding of the recent upside pop (to call it a rally would be an overstatement).

I’m looking for the SPX to revisit the 1316 area within a couple of days. I suspect the NASDAQ will sink to 2260. After that, I’m out again, waiting for the next over-extension to take an opposiing stance on.

It ain’t investing - it’s trading. My ‘investing’ senses see nothing just yet….except the usual volatility of a bear market. More on that topic tomorrow.

Pick o’ the day: I have no intention of ever following up on this stock, but I thought it was interesting when I came across it yesterday….Ingles Markets (IMKTA). here’s the Ingles chart; the rationale is below.

It’s a grocery store that’s been beaten up way too much for me too ignore. The stock looks like it’s finally getting out of a funk, with some very subtle hints that the buyers are pushing harder than the sellers now. That just means I see higher highs and higher lows….and a momentum shift in favor of the stock rather than against it.

That said, don’t forget we have a new small cap company profile coming out Thursday after the close. If you can only do either Ingles or that one, I think you’ll want to wait until Thursday for us to unveil that biotech stock’s name.

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