The volatility of Wall Street is truly beyond description. Do the last two days represent a lasting reversal from last Friday's mini-crash? Or is this the sucker rally for those still trading yesterday's gameplan of buying every dip?

We are very much disposed to the latter interpretation, particularly when we look at the chart of Amazon (pictured below). As previously warned, Amazon had been toying for sometime with an important neckline near $60 of a huge hedge and shoulders formation. That neckline was broken late last week, with the last two-day rally simply bringing us back toward the breakdown point. The current rally looks to be a classic opportunity to add to any shorts previously established.

Chart produced using Advanced GET End-of-Day

As Depicted below, the picture of the DJIA also remains a bearish one, with a 9124 target firmly set in our minds. There may be a tremendous amount of violence and noise with the current market, but the last two days of upside froth are not in the broader scheme of things particularly significant. It is more likely to represent a true "head fake" in an ongoing decline. We'd sell any further strength with stops set at 10,982 (a level where our wave i of III down would get overlapped by the current wave (iv of III?) rally).

Chart produced using Advanced GET End-of-Day

On an overall basis, it is the volatility that stocks have experienced in the month of April that leads us to love the concept of fund of funds/alternative investing. Why deal with all these back and forth gyrations when one can generally get a most lovely return from 10-20 non-correlated professional managers trading a variety of trading strategies uncorrelated to the direction of stocks? Our own fund product is forthcoming by June for any qualified investor so interested.

Stocks are now the casino and the guys making all the money are the brokers, specialists, market-makers, and statistical arbitrage types clipping nickles and dimes consistantly from the massive hoards of compulsive gamblers. Paul Volker recognizes this as do most other sane individuals. Unfortunately, the general public does not, and post his 1996 foray into irrational exhuberance, Mr. Greenspan has turned into a cheerleader instead of the true policy setter he should be.

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Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.