Maybe it would be best, Tarantulas labors lost.  The tone of the market is vividly illustrated by today”s price action in the SPX.  A top to bottom range of 20 points, which is enough to leave the casual observer dizzy, but within that  range 6  major waves, one of which reached 6 points itself on the 5 minute chart.  The 6 waves ground up 49 points.  What is going on here?  Well you could describe it as the dance of the tarantulas or as naked mud wrestling.  Whatever it is you don’t want to be involved in it.  We remarked a few letters ago that the unusually quiet volatility was about to be shattered by enlarged volatility and that truth — that volatility tends to revert to the mean — is amply demonstrated here.  And for all those labors?  Down 8.22 points, -0.59%.

As for a larger explanation of what is going on here — we are paying the price for the breaking of the trend lines here, but how long we will pay, and how much is not known.  The entire market is feeling this interregnum.  Gold and silver are in the dumps, as is the IWM.  Only the bonds and oil are happily defying gravity.  Not to worry.  These episodes work themselves outl and the fact that there has been no appreciable C wave in the SPX we attribute to buyers who have eaten their hearts out since Oct 4 and are scurrying to get aboard.

Readers will remember our comments on the bonds — that a rounding top was in evidence, but that prudent shorts would wait for the breaking of the horizontal line.  The bonds promptly rallied spooked by Spain — or who knows by what.  The line is still good but short is no the way to be in the bonds.  Patience.  It will happen and when it does the carnage will be wondrous to see.

The PnF chart is still bearish on TLT, looking for a price of 96.  So are we.  We just don’t know when.  Casting a cockeye (the only kind you can use) at the political situation we are likely to remain in limbo until November.

So cockeyed we labor on, boats against the stream…bourne ceaselessly ….