Thursday Evening   22 July 2010

 The short position we so strongly "argued" for turned into a loss, [See S & P - Weakness Keeps Showing Up, Click on http://bit.ly/cH4aq4], and we were at a loss as to how we missed seeing such a strong
reversal potential.  The answer most always lies in how one is viewing a market.  For us, the trend has
been down, and it is.  However, for the immediate time, it is really in a trading range, with another trading
range within it.  The chart shows this, below.

  The June 1130 high is the upper range, and the July 1002 low identifies the lower range.  For the last
several days, where we had been seeing weakness and an eventual decline, another, smaller trading
range has developed.  1100 marks the high end, and 1052 the low end.  This was hard to see after the
decline on Wednesday, mainly because Thursday had not yet occurred.  In defense, and often in truth,
many phases of the market cannot be identifed until after the fact.

 It turns out that Wednesday's decline was a retest of Tuesday's Outside Key Reversal.  Once trade
gapped open higher Thursday morning, the rally was unforgiving for the shorts.  Resistance had still
not been violated, and buyers still had to prove their standing.  Well, buyers did just that.  The sell-off
at the close was profit taking, as opposed to new selling.

 There has been no apparent ending action to this rally.  That may change tomorrow or next week, so
until it does, we have to go with what is.  The past several trading days has been like pushing on a
string for both buyers and sellers.

 It is as simple an explanation as we can offer.