EQUITY MARKET COMMENT 10/25/07

Over the past 3 days, the market has had plenty of opportunities to break the 1490 level on the S&P 500, but has been resilient. Not in a constructive manner mind you, but rather a set up of sorts while all the locals get short.

The probability model because of the late day action and the inability to break the market sharply lower has flipped to a 76% chance of a sharp one day rally, perhaps the entire cycle can be completed intra-day.

This should be a very playable move higher with the potential for 20 S&P 500 points.
Do not get too excited though as equities continue to exhibit all the signs of moving counter to the intermediate term trend, which is down.

For intermediate term traders, continue to sell strength and use this up coming rally as a shorting opportunity as nothing in the daily work has changed to warrant a shift in the intermediate term focus.