WHY A GAP DOWN TOMORROW FOR THE GENERAL MARKET MAY STICK
With all the house cleaning the bulls did last week, getting all the "earnings are baked in" bears out of the way, there may not be much in the way of bids to hold this market up in case of a gap down tomorrow morning.
The shorts were cleared out all of last week, especially in the market leading tech space. Not to mention the fact that bears hate three day weekends away from the market in the midst of a table and chair match, where they are getting continually pounded.
As for the buyers, most of the "I don't wanna lose my Wall Street job" performance chasers who underperformed last year and were catching heat from above, are fully allocated into the market following last weeks move up. They weren't going to wait until the second half of January to allocate...they had to do it quickly and they have been chasing performance all of January.
The bids will be light my compadres. Beware of any gap down...the gap may be retraced initially, but that's as good as it will get. A rip-roaring ascent for the markets tomorrow morning - should we open weak - is a low-probability event. Whereas, continued selling pressure throughout the day may be the modus operandi.
