Dire warnings compete with financial fantasy in the ongoing efforts by most analysts and money managers to dissuade investors from demanding selling in a struggling market that is conflicted in so many ways. Simply put, we’ve arrived at the point after nominal Expiration; the internal distribution persists on rallies; at the same time the market gives ground reluctantly because shorts get run-in.

The new week began as we suggested; some minor efforts to extend the upside with no real gusto. While allowing for a brief flailing punch above a visible standard deviation mean that happens to closely track a little daily declining-tops pattern at the moment, we don’t see any prospect for a sustainable rally. What we do see allows a contraction in trading perhaps, given the proximity of a coming Memorial Day holiday weekend, which can allow both rallies and declines to be amplified a bit (due to thin market conditions); but with a bias leaning toward a break to the downside as it sorts out to the bitter end.

I say that because of how they stretch this out trying to avoid resolution; and in my thinking not because of ‘confidence’, but rather of ‘fear’ of the potential for a more aggressive drop, such as a ‘flash crash’. That’s not essential of course; but it is a possibility regardless of any brief effort to probe the upside along the way.

The classic swans are well known; monetary; geopolitical or even economic; both globally and domestically. Just to update a bit: the firing today of the TSA ‘Head of Security’, as you like heard on the newscasts (Mr. Hogan was also Assistant Administrator of TSA, in this case the Office of Security Operations), may be a political expedient; but comes at a terrible time given disorganization anyway, in a season of a holiday that runs right into the Ramadan month where terrorists are pledging new attacks. And as we’ve seen, the attacks generally are not just coming through the security lines. (Today there was an attack at the beach city of Latakia, one of the normally calm spots in Syria and home of Russia’s naval presence. ISIS penetrating that area is likely further evidence of their turn away from Iraq a bit towards the Mediterranean, which clearly has to be deflected.)