It would be hard to say who had a rougher time yesterday, bulls or bears. The day started out pleasantly enough for the latter, with the Dow down around 110 points at the bell. Although at that point bears might have expected any short squeeze to die quickly, it didn’t. To be sure, stocks struggled to get back to unchanged, and they looked absolutely leaden when trading briefly in positive territory. By day’s end, however, with the Dow off 37 points, neither the optimists nor the pessimists could have been happy — only sellers of option straddles.

More of the same today? Maybe.  But bears shouldn’t get their hopes too high. Look at the weekly chart (inset) and you can see that for all the herky-jerky action of the past three months, it still looks like consolidation.  This means that if and when the Indoos break out, the move will carry to at least p2=18724 — a 656-point flight from here. Will we be ready? It’s at least theoretically possible — provided we stay glued to the 15-minute chart day and night. Traders take note: As of around 11:34 p.m. EDT, the Indoos were a ‘mechanical’ buy at p=18072, stop 18023. An 18220 rally objective obtains. _______ UPDATE (May 14, 12:15 p.m. EDT): This trade worked nicely. The Dow bottomed at 12039, fully 19 points above our stop, before launching to a so-far high today of 18277.