http://www.stockrake.com

The pattern looks too obvious to me. Too perfect. Its on all the big indexes. Bernanke is speaking Friday and the way the volatility has been I see two potential scenarios.

1. We move higher tomorrow and test up past 200dmas/50dmas (depending on the index) to the upside. If it gets above that, then we could roll alot higher.

2. The market is playing chicken up into Friday and we just do nothing on a net basis for the end of the week and start pulling back from here before possibly going higher.

What I think doesn’t matter, I’m just filling space with those two scenarios.

No big move will happen until the real money comes in.

If we see a nice pullback like we had from 3-21-07 to 4-1-07 we could be in for a new up trend. The similarities between the two are interesting.

Price was under the 50dma from the February to March 2007 correction for 18 days. Today marks the 18th day under the 50dma for this correction.

What happened after 18 days from February – April?

A big move up (I think we got that today – maybe more tomorrow – I hope not.), then 8 small range days before a new leg up started.

Lets call the new high made on 4-4-07 the beginning of the new leg (I’m talking about the COMPX here). The COMPX closed at 2458 and went as high as 2722.

I think we get that similar backfilling we saw from 3-21-07 to 3-28-07. I stayed short today looking for some lower closes off these exact high closes.

Another note, I think we may be seeing volatility ending its 2 month run. If it settles down and drifts lower, that should help the markets. At least until another shoe drops out of nowhere…