Friday produced a series of failed rallies, the last suspiciously stronger than the rest. This suggests that short covering is the only source of buying power at the moment, and that any rally should be regarded as an opportunity to get short. The yo-yos who drove the futures higher in the final two hours will be less panicky when stocks open Sunday night, but we’ll need to see what Monday morning brings before we judge whether they have the cool to let stocks fall, which is what stocks actually want to do. I’ll try to sharpen my short-term outlook in real time as the new week begins, so stay tuned to the chat room if you trade this vehicle. _______ UPDATE (August 13, 4:25 p.m. EDT): The gratuitous hump carved out by today’s nervous price action will have exhausted bulls and bears alike, changing the picture somewhat. The latter will have grown more frustrated because they failed to extend Friday’s weakness. If the futures print 2844.00 today, exceeding the two peaks shown, shorts had better get ’em in yet again._______ UPDATE August 14, 9:27 p.m.): Yet more pointless thrashing around. Zzzzzzzzzz.
