The red-hot poker that stabbed the bears Friday and Monday afternoons was missing-in-action today. But it’s not like they didn’t try! Take a look at this minute chart of the S&P 500 futures showing the action around 3pm (click to enlarge):

At 2:55pm, a surge of buying began that was 3 or 4 times the previous volume average. The previous chart pattern did not look like a breakout was coming and there was no news at the time. So, this was very likely somebody trying to run another last-hour squeeze play.

They got the futes up to 860, but could not spark another giant rally. Why not? Because the crowd is leaning long and they are fresh out of shorts to squeeze. I’ll bet that they don’t try again tomorrow.

I am not long or short Citigroup, or any financial ETF’s, but I find the chart amusing:

Citi is up huge this week, yet all of the candles on its chart are red indicating constant selling pressure. How does it do that? All of its gains have been made on opening gaps. Once the stock is open, the selling resumes. I’m thinking that somebody big does not want to be in the stock. Mutual funds are probably exiting it.

Citi’s crazy chart seems appropriate for the premier zombie corporation leading America into its very own, Japanese-style Lost Decade.

Put/Call Ratio
Monday registered the second lowest put/call ratio so far this year. Definitely not bullish.

Weak Volume
Volume slacked off from Friday in the big-four ETF’s during Monday’s rally. SPY, QQQQ, and XLF all exhibited waning buying interest, and the IWM’s volume plunged from 161 million on Friday to 97 million on Monday.

Lots More Hedge Funds Will Die
So says this hedge fund manager. The only reason why they are not blowing up now is because they are “gating” – refusing redemptions – and imagine how angry that is making their clients. Rallies will be sold, because they must be.

The three-day TRIN average is flashing a major overbought condition for the first time since the big crash began in late September (click chart to enlarge):

The bottom panel of the chart is the S&P 500. The blue line in the top panel is the three-day average of the TRIN. The red line is where the TRIN is very overbought. The green line is where it is oversold.

In a normal market, this indicator flashes good buy signals at the green line. However, in this historic bear market, prices plunge even while deeply oversold, so I have not been relying upon the TRIN for buy signals lately.

Notice that the current reading of 0.71 (in blue at the right) is the most overbought condition we have seen since September 18th, which was not exactly a great time to be getting all giddy about the market.

I have used this indicator to print money here and here, for example. I put on some short positions this afternoon, and am looking to add more into any further strength.

Also, notice that the three-day candlestick pattern from September 17, 18, and 19 (blue arrows) is exactly the same as the pattern of the last three trading days.

Level Drama
I enjoy “level drama” like we had on Friday with the S&P 500 trying to break back above the October 2002 intra-day low of 768.67, which it did in the afternoon after some trouble in the morning. However, this sort of level drama should not be a main focus on days where the market is likely to be rigged such as Friday’s options-expiration, month-end window dressing, or things like the presidential election earlier this month. 768.67 will matter again – maybe early this week, or early next week after the month-end window dressing is done.