Today’s post-Fed rally is a bit stronger than I would hope for.  It’s not that much of a surprise because it is eating through the 2/27 decline which fell so rapidly.  However, the slope of today’s move is not sustainable and not as healthy as bulls would like you to believe.  I cannot construct chart curves, but if I were to try, it would not look like today.  Just because I said I was bullish yesterday does not mean that I will stop criticizing questionable moves.  When the market was falling on 2/27, I made similar comments about the decline in emails to a HEDGEfolios member.  Here’s an excerpt:

“i have been bearish but i don’t believe today is the end of the bull run.  i won’t go into elliott wave crap or fibonacci but it would surprise me greatly if this market turned on a dime and went really bearish.  more likely, we will get some support around 1385.”

And on 3/1/07 I said in another email:

“i will be very surprised if we head straight down …..
“until then i’ll just make blunt comments and tell you that the slope of the decline is unsustainable”

“…. what ends up happening to this selloff - there is a high probability that we will approach the 2/22 levels although  i am not sure about beating it.”

I feel the same thing about this afternoon’s spike - the slope is not sustainable and I am expecting some selling in the very near future to bring this move to healthier levels.  If not, we are rebuilding risk at previous highs that would be tougher for us to handle.