The market is having a great start to 2011

The QQQQ is up 7.30% and SPY is up 5.85% in 2011.The model in NASDAQ is up 26 weeks in a row wow! That is an awesome move. In the next morning are the economic numbers and expiration. By 10EST Friday after Philly Fed we should know if we are going to go to 1343 and 1355. If we do, then we unwind next week. I will be very light by Thursdays Close.

The market is acting great, yet if an inflection point is about to come it would about in this time frame. In June everyone thought I was nuts for saying the economy is better and market is fine. All we have right now is perhaps a short term top. You can't find a BEAR anywhere. Transports sure act well. Will they act so well if oil takes off to the up side? There is a very good chance we get to 1343 in the am.

By this point we will be very over bought short term.

ES---- WHAT ARE THE OPTIONS AND PROBABILITIES

• 1306.00 YOU BUY.
• GAP DOWN IS PERFECT FOR TOMORROW
• VOLUME HAS SLOWED
• EGYPT ETF NOT MOVING NO ONE CARES NOR SHOULD THEY. OIL WILL NOT GET DISRUPTED.
• SPREAD BETWEEN BRENT AND SWEET LIGHT MAY NARROW FROM ITS WIDEST POINT.
• BRENT CRUDE 102.39 IS HOURLY PIVOT
• MAYBE BRENT IS THE BEST GUAGE OF STOCK MARKET DIRECTION FOR NEXT 48 HOURS.
• LOWER BRENT- HIGHER MARKET .
• NARROWER SPREAD WITH LIGHT CRUDE- HIGHER MARKET.

XLF put/ call

203k puts were bought today on XLF vs. 8k calls. Bullish for bank sector.

Are S&P 500 All Time Highs Possible in 2011?

The pace of play has certainly slowed down ever since the monthly model went into a sell on the VIX index. The VIX is currently at 15.93 and is looking to bounce from current levels. The look is of the VIX is one of working its way to all time lows of 9.31. The stock market is literally doing the best job I have ever seen of self correction. It is pulling shorts in and spitting them out.

It really is a tremendous testament to the power of the secular move higher in stocks and the economy. The Economic recovery is coming along nicely and the break out in the NOB spread is telling us to look for further improvement in the economic and unemployment data. The back drop is firmly secure and we continue to trend higher.

The investment environment has changed considerably since the bottom in 2008. The world has gone from massive fear to one of optimism and new confidence. The public has once again started buying equities. The exodus from the bond market is now in full force.