12.20.2011 -- Santa showed up...

Looks like the market finally decided it wanted a Santa rally to close out the year and window dress the quarter.

Quite a big up day for little news and equities definitely decoupled about halfway through the day from the EUR/USD and Gold. Oil and the 10 year yield tried to keep up, but equities were just on a mission of their own.

We will analyze what today meant in todays chart.

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Key Levels

Upside -- 1248, 1262, 1310

Downside -- 1230, 1216, 1203, 1196, 1121

(just like that.. we are getting lopsided to the downside already)

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SPX Daily;

So here we have the result of today.

While we took out a couple of overhead resistance areas, we didn't take out anything significant except the 50dma. Thats probably why the market was able to produce such a large rally.

We appear to have closed below or right at our previous channel and we are still right in the middle of the large narrowing wedge.

I've outlined where I think the market might be heading between now and say middle/end of January.

I think we'll headfake out of the top of the large wedge and then proceed to plummet.

I do though think that they will be able to thrust this up into the end of the month after a bit of pullback from today.

Middle of January is going to be a very prime opportunity to short this market.

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Oracle missed earnings pretty badly and was down 8% or so AH. That will weigh on tech stocks tomorrow if the market had any grand ideas of a big follow up rally. Although, you would have thought the vote down of the pay roll tax extension would have at least blipped the market today, but it did not. Everyone just hit the buy button on the computers and went to the mall today.

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As a side note.. I am expecting my 2nd child soon, so I may suddenly disappear from posting at some point here soon. Once that happens, I will be removed from posting and the markets for about 2 weeks or so. So, don't worry, i'm not dead or anything, I'll be back. ;)

GL

CJ

12.19.2011 -- Pinged the 100dma..

Today we exactly pinged the 100dma and the bounced but only slightly.

There are only 2 key levels of support left at the 100dma (1203) and the bottom of a large wedge we are tracking. (1184) Underneath that is air til 1121 and then air again until 1098.

The Stochs are still in the middle on a sell and the MACD just turned negative. There is still plenty of room for selling if the market so chooses.

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Key Levels

Upside -- 1213, 1229, 1251, 1260-1265, 1310

Downside -- 1203, 1184, 1121, 1098

(running out of downside support, may get lopsided soon)

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SPX Daily;

This chart shows both the large wedge and the channel. We are below the channel, so support on that is lost at the moment. What we have left is the 100dma and the bottom of the wedge.

If those 2 areas of support were to get taken out on a close, things could turn ugly in a hurry. In particular breaking that big wedge south would really send the market into a hissy fit.

The Stochs are at 49 on a sell and the MACD just turned negative, so there's still plenty of room for selling.

We MAY get a couple days of bounce off of the 100dma that we pinged today. Hard to say if we do or not because the bounce intra-day was so weak, but it's possible, however I think would be something short term to try to close out this week with on some kind of positive note.

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The financials took the big hit today. The Russel 2000 was trying to hold ground and then gave up late in the day. Some of the momo stocks were holding their own.

Leaders are disappearing though. Stocks like AMZN and LULU that were strong leaders have had a really brutal couple of months.

Right now we are left with IBM, GOOG, AAPL, CMG, HANS and a hand full of other stocks that are holding up and near highs attempting to lead.

The chart patterns for these stocks do not look good though. HANS and CMG for example both are building what looks to be a large bearish rising wedge.

Commercial real estate is also holding up relatively well still. The desperate search for dividends is still strongly in play.

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How this week ends could be pivotal to what happens very short term. A poor ending to this week heading into Christmas that takes out support could be potentially devistating. We'd only need about 20 more points south to do so.

GL

CJ

12.15.2011 -- Rejected the 50 and bollingers..

Not much of a change today. We attempted to rally on the obviously unmanipulated government economic rally. We rejected resistance basically where the 50dma and bottom of the bollingers are hanging out.

That sell off put us right back into empty space, below the bollingers, below the 50 and 200 and with the stochs still near the top and on a sell.

Today was the markets chance to get back over the 50 and back up into the bollingers on the good data and set itself up for another run into the north pole.

it failed.

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Key Levels

Upside -- 1225, 1239, 1256-1264 (heavy resistance area), 1310

Downside -- 1202, 1180, 1121, 1098

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SPX Daily;

Same chart from yesterday updated. You can see where we rejected resistance and how we are floating in no mans land where I don't think the market has any choice but to fall to next support at 1202 and try again to bounce and gain momentum.

Not a lot else to add here.

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Only other note from today is that IWM/Russel 2000 held up well today, it heavily outperformed the other indicies. It's pretty much what kept the market from turning red today.

Most of the big name leaders from the rallies several days ago (CMG, MA, V, GOOG, IBM) they got whacked yesterday and did a lot of nothing today.

This is a whipsaw market devoid of leadership working inside a government with major issues facing it.

In other words, this is a bear market.

GL

CJ

12.14.2011 -- 1 area of support left..

We have continued selling off. Lots of nervous longs, I'm sure, that were expecting a santa rally. If the market is going to try to pull one off still, it is going to try from the zone I have labeled in tonights chart.

Commodities got rocked today. Liquidations galore. Oil, Gold, Silver, etc. all took massive hits today. The 10 year was heavily bought.

What does this tell us? Lots of fear of the Euro collapsing.. the result of that would be a dollar surge.. commodities would get hammered and there would be a mad rush into safety into already ballooned US treasuries.

Folks think the Euro is going to fail.

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Key Levels

Upside -- 1223, 1228, 1234, 1260, 1283

Downside -- 1207, 1180, 1121, 1098

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SPX Daily;

Same channels from yesterday. I've labeled our support zone. This is the last area of defense for this market to initiate a santa rally from. If it does make that attempt, I think it will only be a short lived bounce from support here before continuing lower.

You can see we are just rolling in the stochs and still positive on the MACD. Which essentially means there is still tons of room to fall.

The bottom thin blue line is the bottom of our big wedge. That is the last line of defense for this market. If that breaks, theres the potential for a cascading waterfall down type move.

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Market participants are obviously worried here. While it wasn't a huge down day for the market averages, it was a massive down day for commodities in general and a huge up day for bond prices (down day for bond yields).

The EUR/USD broke significant support to the downside. Gold also broke significant support.

See Gary Kaultbaums report today;

http://garyk.com/?p=2149

Both of these things are indicating that what we saw today; massive commodity sell off, massive run in bond prices, and massive sell off in the EUR/USD. That those things are going to continue and possible continue at a feverish pace.

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Something to beware if you are short...

All these things scream deflation in the United States.. on the back of a soaring dollar in the face of a collapsing Euro.

If Bernanke sees what I am looking at.. and obviously he does. He's going to be quite tempted to initiate expectations of more trillions of liquidity being flooded into yet another program.

Nothing keeps Bernanke up later at night than the thought of deflation. Inflation is his good old buddy, his drinking pal, his long lost brother. Deflation is his nightmare from hell.

Just dont be surpised to see Bernanke hinting at some Trillion dollar program if we continue to see the same type of movements we saw today in the markets.

Bernanke probably is not sleeping well tonight.

GL

CJ

12.13.2011 -- Not looking good for a santa rally..

Not a real good close for the market today. It was a wide trading range that closed deep in the red.

We took out the bottom of the bollingers and now the only things standing in the way of a fairly big sell off is the 50 and 100dma's.

You might start to get some nervous longs here that were expecting the santa rally that see another day like today and only 7 trading days until Christmas and think that maybe we've already seen whatever we are going to get.

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Key Levels

Upside -- 1235-1240, 1255-1265, 1285, 1310

Downside -- 1221, 1208, 1180, 1164, 1121

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SPX Daily;

I modified the channels again. This is a pretty complicated pattern that can be drawn many ways. That large wedge, yesterdays fork, todays channels/fork. I'm not sure yet which one is correct, you could really fit all of them. So think of them all as just crayon scribble guidelines.

Right now, I think the concrete things to pay attention to are the bollingers and the moving averages. The rest is fuzzy at best, including EW as there are a number of possible counts both short term and long term.

So key for today is that we closed below the bottom of the bollingers. This typically can set off a cascade of selling where the market continues to sell off below them and stays below them for quite awhile as the bollingers rollover and catch up.

What could stop us is that the 50 and 100 are both within 20 points below us.

So if the market wants to use one of those as a springboard and fit in a santa rally, it can do so soon.

If we take those out however, all bets off and theres only 4 areas of support before the market would hit air and really fall off a cliff.

Another key item from today was that we were up quite a bit and put in a reversal and closed pretty deeply red. This isnt one of those classic days that mark tops where the market is up 250 and closes down 250 and marks a big reversal top... but it is a day we were up 100 on the DOW and closed down 70. We haven't had an intra-day reversal like that in quite awhile. Most days lately have been maybe a quick reversal in the first hour and then run with that direction the rest of the day.

Because I think longs may get nervous here with so little time left til Christmas and bad earnings from Best Buy and below concensus retail sales data.. I think we are about to embark on a selling spree here.

GL

CJ

12.12.2011 -- Market is in a position to sell off..

If it wants too.. that's a big IF right here in front of christmas, the way the technicals are set up, the market has an opportunity for a good drop here if it so chooses.

Details to follow....

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Key Levels

Upside -- 1243, 1262, 1282, 1305

Downside -- 1221, 1205, 1140, 1121

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SPX Daily;

Our old channel just wasnt working anymore, so I replaced it with this fork and smaller channel. The large wedge is still in play as well, but I didn't draw it here because it gets too confusing with the new fork in there as well.

So, details of why this market is set up to sell off here;

1) It seems like we are just whipsawing up and down here.. BUT, the bollingers are rising.. so while we are basically in the same spot we were a couple days ago, the mid bollingers have risen above and we bounced off the bottom of the bollingers today. So we are in fact taking out support.

2) The bottom of the bollingers, the 100dma, the 50dma and bottom of the channel are all clustered within 30 S&P points down. 1 really big down day or a couple good sized down days could take out all that support. If that were to occur, we would be left with hardly any support down to about 1140 for weakish support and then back to our 1121 support.

3) The bollingers are curling over, the 200 and 100dma's are both still in a downward trajectory.

4) The Stochs and MACD are both sitting at a point that could kick off a severe round of selling for several weeks before being very oversold.

5) Nobody would expect a big decline right into christmas.

so.. we shall see.. but the opportunity is there. the set up is there. we'll see if the market shows its hand at all.

GL

CJ

12.08.2011 -- Resistance held..

As suspected, the resistance was stronger than support and we fell pretty hard today as there was a large air pocket until first support.

We bounced off the mid-bollinger bands, but did close near the low of the day.

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Key Levels

Upside -- 1263, 1303

Downside -- 1229, 1217, 1211, 1196, 1174, 1121

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SPX Daily;

You can see we broke back down into the bollingers and then stopped just at the rising mid-bollingers, but still closed near the low.

Will be interesting to see what happens from here. The 100 and 50dma's are not far below here and at the moment it appears we are holding as that large wedge.

From and EW prespective, we probably have another rally coming to the top of the channel, but that doesn't have to happen. There are possible scenarios which allow us to just tank right here and now.

For now though, unless we break back below all MAs, I will stick with my previously outlined outlook of selling off here and then producing yet another strong rally into year end.

GL

CJ

12.07.2011 -- Rejected again..

Not a lot to add today. We again took out the 200dma and then proceeded to close below it. We also pinged the trendline that could be forming a large wedge instead of a channel.

Rather than burning off some overbought, we just seem to be getting more overbought on the daily during these last few days of gyrating.

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Key Levels

Upside -- 1263, 1266, 1301ish

Downside -- 1257, 1244, 1223, 1212, 1183, 1170, 1121

(Getting very lopsided now)

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SPX Daily;

Not a whole lot of change from yesterday. We rejected resistance again.

The market is running low on time here on getting over the 200dma. What happens here soon may clue us into whether this is a big wedge or a corrective channel as we are rejecting the 200 and the top of the wedge right now.

We were falling today back into the bollingers and the market managed to stage the rally and close just back on top of them.

We are wedged here into a very tiny space of resistance and support.

I think the resistance is stronger than the support and we are overbought.

GL

CJ

12.06.2011 -- Rejected the 200 again..

Nothing dominated the headlines today, so I will refrain from another anti-ogliarchal rant.

But even with nothing in the headlines, we rejected the 200dma again. Pretty much the same as yesterday, except today we printed a little red DOJI candle, but still closed above yesterday.

The stochs are starting roll now.

I see the futures are up at the moment, but I dont believe it at all. A rollover is probably imminent here for the next move in this pattern.

Of course, barring the EU discovers a herd of euro shitting unicorns in the hills of Ireland.

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Key Levels

Upside -- 1264, 1270, 1300ish

Downside -- 1252, 1212, 1177, 1169, 1121

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SPX Daily;

Same chart as yesterday, but showing how we rejected the 200dma yet again. We are still hovering about the bollinger bands. If we cross back into those, there is no support for about 40 points.

The stochs are topping as well.

Another thing I added is what looks to be another important trendline at the moment that has us potentially forming a big wedge rather than a channel. If it were a wedge, its huge and the resulting move out of it would be very large. Its a somewhat neutral wedge with a slight lean towards a bearish wedge because of the steep rising bottom.

The potential wedge is still 100 points wide and would take about another month and a half to reach a point of forcing a resolution.

Again.. interesting timing.. plenty of time for a christmas rally and January is a popular time to kick off sell offs.

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One last interesting note.. (I can post charts showing this on Thursday)

1) We are just underneath the mid-bollingers on the Monthlies.. the same was the case in May 2008 just before the market dived.

2) We are smacking the top of the bollingers on the weeklies.. again, the same was the case in May 2008 just before the market dived.

A lot of very intersting similarties between the 2 tops and following moves. But we'll get into that deeper maybe as a christmas vacation special post.

GL

CJ

12.05.2011 -- Interesting timing..

very interesting timing for S&P to put Europe on credit watch negative. Just as we were taking out the 200dma, S&P shows up with the news and causes us to reject it and sell off.

did we sell off because of the S&P news or simply because we rejected the 200dma? Classic argument.

considering S&P's history, I'm forced to wonder why the powers that be decided today was a good time to release the news on the verge of a break above the moving averages.

I'm forced to believe that Ben maybe knows he cannot let this market break higher as he knows he must continue printing in support of both the US credit market and Europe and he cannot be constrained from doing so because he is confronted with a surging bubble market and inflation.

but that's just tin foil consipracy stuff right?

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Key Levels

Upside -- 1265, 1300

Downside -- 1244, 1212, 1205, 1173, 1168

(been doing this blog 5 days a week for over a year now.. one consistent pattern has been when the Upside/Downside # of key levels gets lopsided, it almost always means a reversal is near. Not sure if anyone else has paid enough attention to notice this.. i only did because I write them every night... worth watching)

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SPX Daily;

There is our corrective channel. The picture has cleared up quite a bit overall. Usually the "clearing of the picture" is a bad sign for us technicians and especially Elliott Wavers. Clear pictures are often rendered cloudy.

The clear picture here is that we have a 5 wave down bottom at 1075. We appear to be in an ABC corrective, A and B are finished at 1293 for A and 1155 for B. We are currently in C.. now we have 5 waves.. so we either finished C or we finished 1 of C. I personally think we just finished 1 of C and are about to correct this severe rally and then finish up this patter for the rest of the month. However, if we are done with C, its a failed C as it did not reach a new high and we are about to tank severely. I just don't see that happening in front of Christmas. But all that is part of our "pretty picture" here. Nice and clear with timing and all.

I dont like nice and clear, it always makes me nervous when things look like a lock.

I outlined in Green where I think we'll go for Wave 2 and 3 of C. I don't know if we'll finish 4 and 5 of C at the end of the Month or in early January.

This ABC is a violent pattern.. typical of a bear market correction. Massive swings in both directions... swings that normally are moves the market takes an entire year to do and you get equivilent moves twice in 2 months.

Slow Grinding = bull
Violent in both directions = bear

There is no escape for the world from this mess.. there are only 2 solutions..

1) massive printing and massive resulting global inflation
2) massive defaults of sovereign debt globally (Europe, US, UK, Japan, + many smaller independent countries)

Neither of these options have good outcomes economically for the worlds industrialized nations. Massive inflation or massive deflation. One risks loss of confidence in the worlds fiat currencies the other cripples the worlds credit markets.. both risk systemic break down of global financial systems.

Fools.. the inability to acknowledge and fix this 30 years ago has turned a firecrakcer into a global nuclear bomb.

GL

CJ

11.30.2011 -- Global bailouts are fun...

Well.. apparently I'm not the only one that had a feeling we were about to collapse and obviously those more in-the-know than me knew things were about to go down. Zerohedge has postulated that a large bank in Europe was on the brink last night and it really has to be something that big to get the action we got.

Essentially we got a globally co-ordinated can kicking bail out by the worlds central banks.

Short term it obviously changes the landscape, but only short term, in the end it changes nothing, so it will remain to be seen how long the effects of this action last.

As pointed out by Zerohedge, the last time we had a globally co-ordinated action similar to this, the effects lasted only days. If a large bank is truly on the brink, I'm not sure how much lowering overnight lending rates by a half a point is really going to help. I would suspect that money is being diverted to them, probably from US tax payers, as we speak.

Sad... what the world is becoming... one giant global ogliarchy spending massive amounts of money to avoid deserved failures at further expense of the suffering tax payers.

In the end,.. nothing good will come of this.. nothing. Only worse and worse eventual outcomes will result.

We now have global moral hazard. And a global backstop coming from your pocket dear reader. If only most of the American middle class had the education to realize what is really happening. How their children are being robbed to save some bank in France or Italy. They don't teach concepts about money in public school for a reason I think. Only thing you learn in public school is one short class about how to balance your household budget and checkbook. This is not by accident.

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Key Levels

Upside -- 1252, 1265, 1280

Downside -- 1227, 1214, 1208, 1173, 1150

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SPX Daily;

So this is what we have now I think after our global salvation.

It will be very interesting to see how long this lasts. We are still under the 200dma and despite the tremendous 3 day rally, we havent really broke out of anything. It only looks like a very severe bounce at the moment.

We shall see...


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What is incredible these days is how starving the investment world seems to always be for good news. Anything really, rumor, whatever.. if it sounds even a little bit good it will ignite a rally, even if for only an hour.

There's 2 ways to look at todays news..

1) WOW! Global bailout,.. everything will be saved by the worlds central banks! All debt will be forgiven! The world is saved! Look up.. Unicorns are shitting skittles in the clouds!

or

2) holy shit.. things are bad enough that something was about to explode that required the co-ordination of several nations central banks to avert a global disaster. it stopped it for now.. but how much is a half point cut in overnight rates really going to help and it can't be the only bank in trouble as we've already seen the collapse of MF Global here and Jefferies been in danger.

Clearly.. the markets are only thinking #1 right now when any of this happens. Obviously there is no fear at the moment that maybe a half point really isnt enough or that there might be more dominoes waiting.

The only question here is how long it takes before the market begins to look at it more like #2.

Which is what all this is.. a big stinking pile of #2.

GL

CJ

11.29.2011 -- BOO!!! cover your shorts!

Alright,.. first a disclaimer.. could this be the C wave I was talking about before when we had 2 possible elliot wave counts and we needed one more big rally before the collapse?.. yes it could. We could certainly take one more big rally north and it would work out time wise as we would close out the year strong and head possibly into the mid-1300's by mid January.

Is this possible? Yes.

Do I think that will happen? No.

The market is trading like a bear market. Bear market rallies are furious and powerful, and this would be the time of year to do it, but the market sentiment just doesn't support it.

I've been at this for a long time and I really feel like these past 2 days are nothing but a trick to get you to either go long a bounce, cover your shorts or just get into a "trading" the market mode rather than just sit on your position and let it happen.

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Key Levels

Upside -- 1202, 1215, 1230, 1266

Downside -- 1172, 1121

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SPX Daily

So here we are.. we rallied up to resistance at both the 50dma and mid-bollingers and then sold off right back to the edge of the channel.

Let me just say... closing back into that channel will be a death blow for the market short term.

The Stochs support some rally time, but on the daily.. we rarely get a perfect roll off the bottom and head north or the opposite with a roll off the top. We will almost always roll on the bottom or top for a long time before changing direction.

Long story short.. I feel this is a trick.. I feel i've played this game before. I feel like after 15 years of watching this game play out that i've seen this move and its bait on a hook.

Could we do the seasonal rally and fit the wave C EW count and all fall perfectly into place? Yeah..

I just don't think its happening this particular year.

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What to watch..

If we get back above the 100dma on a close and stay there for more than 2 days.. then I will strongly consider the option that we are going to rally into year end.

Otherwise, i think this market has some major selling to do.


GL

CJ

11.28.2011 -- Scare the shorts off the shorts

Big jump today. It didn't really get anywhere though except back inside the bollingers. Despite the big move, we didn't take out any important areas of resistance. In short, it was a big rally off very oversold conditions after closing on the bottom of the short term channel we were watching last Friday.

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Key Levels

Upside -- 1205, 1210, 1218, 1240, 1266

Downside -- 1174, 1150, 1121

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SPX Daily;

Heres a larger down channel. We have fallen into it and then todays rally burned off some oversold and rallied us right back to the top edge.

We may poke back out here.. but I suspect we stop at some of the resistance directly overhead and then violently head back south into this channel. The target at that point would be over 100 points lower.

Remeber folks, this is not how a bull market trades. A bull market will add 8 points to the S&P 21 times in a row. Just grind and grind and grind and eat up time and make you think that any minute now it will reverse because its been up for 15 days in a row. That is not this market.. this is how bear markets work. Moves to the extremes burning both shorts and longs out of their positions.

Too much debt cannot be bailed out with more debt. Printing will eventually destroy your economy, it only delays the ultimate end.

Despite the daily news and headline risk.. this market is trading just like any other classic bear market. It just appears to be whipsawed by daily news. It will eventually travel to exactly where it intends to and already knows its going. The rest is just noise.

S&P 400 within 3-4 years folks. Continue preparing yourselves for a very very difficult economy. Get out of as much debt as quickly as you can.

GL

CJ

11.22.2011 -- Scraping the bottom

We temporarily broke the bottom of that channel again today and then again managed to close right on the bottom of it.

While the MACD and Stochs now provide for a bounce opportunity, as well as still being in the channel, things don't look good for the market right now.

We are below all moving averages on the daily and they are starting to curl over.

The market now needs a ripper of a bounce.. if we just hang down here or just go ahead and break lower it will only leave this market a couple areas of support. 1140-1150 and 1120.

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Key Levels

Upside -- 1200-1207, 1222-1230, 1253-1269 (lots of strong resistance now above us)

Downside -- 1182, 1150, 1121

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SPX Daily;

Here is our channel. I had to adjust the channel slightly from yesterday and draw it at the steepest angle possible in order to keep us inside on the close.

I have a personal habit of adjusting when possible in a way that allows the oposing position from what I currently think, the highest chance of success. In other words, I will always make an attempt to adjust the chart, IF POSSIBLE, if it will allow for a set up that is the opposite of what I think the market is going to do.

In this case, I think we are going lower short term. I adjusted my channel allowing for todays close to still be inside the channel. It was possible to draw it that way, so I did.

This keeps me honest.

That said, the market cannot go much lower here without really breaking down lower.

If it breaks below this channel and stays there, there's only a couple levels of support and they both occur after large gaps lower.

1121 is still our critical level as far as whether this market still has a holiday rally left in it to head into next year.

Things are beginning to not look good for it here. Large impulsive sell offs and beginning to string together down days. Being below all the moving averages again on the daily is also a bad sign.

What happens next is critical. We will either bounce hard from here soon or we could immediately break lower or we could flounder around here til next week and then break lower. Both of the latter options are not good for the market. The market needs a strong rally to appear soon.

GL

CJ

11.21.2011 -- Another big sell off..

The big sell offs are starting to stack up here. But, we still really can't say this market is done rallying unless we take out 1121.

We finished today at the bottom of a new channel which is what our previous flag has morphed into.

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Key Levels

Upside -- 1207, 1223, 1237, 1262

Downside -- 1193, 1121

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SPX Daily;

Heres our new channel for the moment. However, we are already sitting at the very bottom of it. We had broken that support intra-day and managed to close back above it.

I'm still considering this a B wave. Its obviously going to cut lower, but I still think the highest probability is that there is another rally left in this market.

The good news is that there's cut offs where we can say that idea is dead. That for me is if this market keeps having sell offs like today within a short period of time and takes out 1121 to the downside. That will mean bad things for this market.

This market loves to confuse.. so I expect the 1121-1140 level to be tested (even if only intra-day).

Another thing to note is that we have burned off almost all the overbought levels in this market. Notice that the MACD is almost negative again and the stochs aren't far from dipping under 20. Like always though, oversold can become more and more and more oversold.. so don't take anything from that other than the potential for another rally is there and be aware of it.

GL

CJ

11.17.2011 -- Broke lower

We broke lower out of our flag today. That essentially means wave B of this ABC pattern is going to cut lower than originally thought.

The only thing that can bring back the idea that we have already started a big Wave 3 down is if we tank here, and I mean like 800 DOW points in 3-4 days and in a row.

Tough to come up with a new target for B, but 1150-1160 looks like a potential stopping point, with 1121 being really the rock bottom before thinking that we are in that big wave 3 down already. Considering we broke our flag south, I would expect the market to push this to the extent to confuse everyone and probably reach somewhere in the 1121-1150 area. How we get there will be important.

Keep in mind though, 1204-1216 has some strong support. So its possible we just stop there.

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Key Levels

Upside -- 1226, 1240, 1248, 1263

Downside -- 1206-1210, 1184, 1158, 1121

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SPX Daily;

Theres the clear strong break.

But you can see we have some support right here. We also have a Fib tracement that we bounced off of today (sorry this is unlabled in the chart, but that was the low today). Plus we have the 50dma right below us.

Getting back under all the moving averages could potentially be very bad for the market. But until/unless we get below 1121, we cannot really consider being in wave 3 down yet. If we start tanking here, like 100-300 points off the DOW everyday for 3-4 days straight, then its back on the table. For now though, we will operate in a manor that we believe the market will slide to 1204 and if 1204 breaks, then we may see something under 1150 for this B wave.

As has been usual lately, how this trades is important. How violent and how fast it is.

GL

CJ

11.16.2011 -- Bottom of the flag

We sold off today straight to the bottom of the flag. We did clear the bottom of the bollinger bands but we didn't get through the bottom of the flag.

It is possible that we break lower out of this flag and cut deeper for wave B, but I'm thinking its more likely that we maybe have a false break lower and then spend some time traveling back to the top of the thing and thats how they'll get this patter to last past Thanksgiving before breaking north.

-----------------------

Key Levels

Upside -- 1239, 1253, 1271, 1290

Downside -- 1236, 1226, 1220, 1204 (all pretty significat levels of support)

-----------------------

SPX Daily;

We stopped right at the bottom of the flag. We are also 13 points above the 100dma and 35 points above the 50dma.

Also noticed that just bouncing around and some time has allowed the MACD and stochs to correct some. The MACD down from an extreme level of 21 back to 12 and the Stochs off of overbought and back to a neutral state. This is the room the market needs to launch for that final rally wave.

We can break down out of this flag, but it would likely just be a deeper cut for wave B. It would take a close below 1204 to make me think otherwise.

This is a very headline driven environment, but it would take more than the daily dribble we are accustomed too lately to actually change the current structure of the market. We would need some kind of real concrete news that was truly a major decision rather than all the blubbery crud that comes out every other hour.

GL

CJ

11.15.2011 -- Still bouncin..

Not much new to add today. We are still bouncing along as expected. The range of our flag has narrowed to 20 S&P points and we are somewhat in the middle of it.

This pattern can be drug out to past Thanksgiving. I would expect that to happen as the entire rest of this pattern needs to take as long as possible to make it past Christmas before a major decline begins.

-------------------------

Key Levels

Upside -- 1265, 1271, 1290

Downside -- 1253, 1239, 1227, 1204

-------------------------

SPX Daily;

There we are. Nothing really new to add from yesterday. As I mentioned, volitility would seem to drop going forward until we exit this flag. Its just a small calm before a large storm.

There is heavy resistance up to about 1290 when/if we do break up out of this flag. It will be interesting to see if we can go as high as teh 1310-1340 zone with the large Wave 3 down waiting in the wind.

Keep watching oil folks. Its trending up even with a market just bouncing around and in the winter on top of that.. looking for 5$ gas by next May unless we have the S&P at 600.

GL

CJ

11.14.2011 -- Bouncin around..

We are still just bouncing around in that flag. I think we have another week or so left still to finish it. Volitility may appear to start to fall off heading into Thanksgiving, unless we break out of the flag before then.

Still have to assume this is a B wave flag and that we have a end of year rally heading at us.

------------------------

Key Levels

Upside -- 1265, 1272, 1290

Downside -- 1227-1235, 1202

-----------------------

SPX Daily;

As requested by a reader, I have labeled the current expected Elliott Wave count. This assumes our blue flag is a wave B with C remaining as a holiday rally, which will be followed by a big wave 3 down.

A close below 1225 would invalidate the theory tha this blue triangle is wave B. So a breech of that level would indicate B is going to cut deeper.

I've also included the old channel so you can see where we might go if we were to break south of 1225.

There's not a whole lot more too it at the moment. I suspect we spend some time in this triangle so that the following rally will last all the way through christmas and the new year. Either that or we break south and B cuts a bit deeper and eats up some more time before the rally starts.

GL

CJ

11.13.2011 -- Quick sunday update..

It's looking more and more like this is a wave B and we are in a small triangle/flag with another sharp rally coming into year end.

But I will say... its so obvious at this point, that it gives me pause. I generally don't like when the market is only giving you one option, cause that option often ends up being wrong.

------------------------

Key Levels

Upside -- 1269, 1290, 1308

Downside -- 1249, 1227, 1200

------------------------

SPX Daily;

We're going to focus on this triangle/flag that I previously had in red. It seems overly obvious that we are going to bounce up and down in this flag until the end of the month and then probably seasonally rally pretty hard for wave C up all the way through December.

It's staring everyone in the face. I don't like situations like that. When it seems very obvious like this, you have to pause a little.

But, I will say, this is all lining up timing/sesonally/pattern wise right into a perfect pattern.

Outside of a complete plunge out of nowhere on Monday or Tuesday,.. and it would have to be a hell of a plunge.. I'm talking near 100 points on the S&P... I would expect us to bounce around in that triangle for another 2 weeks and then rally hard for a month and then look towards some kind of complete collapse coming after the new year, probably in the 2nd half of January.

----------------------------

side note... watch gas prices.. I think we are shooting towards 5$ a gallon by Spring.

GL

CJ

11.10.2011 -- Expected small bounce...

As mentioned yesterday, if this is a B wave I would expect a bounce after yesterday considering the support we closed on top of. That did in fact happen today.

The bounce was not very powerful, but it was a bounce. For the big wave 3 down to stay in play, we will have to tank hard again tomorrow. Just as bad as we did 2 days ago.

Knowing the market loves to keep us all confused. I almost expect another 40 point S&P drop tomorrow.. but we'll see.. more below

----------------------

Key Levels

Upside -- 1251, 1272-1280

Downside -- 1227, 1199, 1121

* just a note here.. unusually large gaps between levels of support and resistance right now.. the next big move will be powerful.

----------------------

SPX Daily;

Here's pretty much the same things we had going on yesterday. We just had a relatively small bounce off of a double support area. Honestly, considering the support we landed on, the bounce should have been bigger and as a result has a bearish feel to it.

As I mentioned in the beginning, for the big wave 3 to stay alive, we will need to tank another 40 points tomorrow or Monday at the latest. Just to keep us confused with multiple options, I almost expect this to happen.

The alternative is we continue to bounce around inside the red flag I have drawn in there. That would pretty much confirm we are in a B wave and will be starting C up in the next couple weeks.

----------------------

Side note, I want to thank folks for a few donations I recieved recently, they are much appreciated. It might take me a day or 2 to accept because the account is in the verification process, these were the first donations I recieved. :)

GL

CJ

11.09.2011 -- Well that was ugly...

The market loves to confuse us. Yesterday I mentioned that the idea that we were in a big wave 3 down was all but dead and to keep it alive we'd need to drop over 100 S&P points in a week or less. And right on cue, to make sure we stay confused without any concrete answers, the market plunges 46 points in 1 day.

I'm still reluctant to say that a big wave 3 is back on the table, I think its more likely that we are just in the last phase of the B move of this ABC correction for wave 2 up. But it's no longer impossible. If this is a big wave 3, we will continue to tank and take out 1121 pretty quickly.

-----------------------

Key Levels

Upside -- 1234, 1255, 1272-1280

Downside -- 1229, 1199, 1121

-----------------------

SPX Daily;

You can see we closed on a critical point yet again. We are on a small trendline for a potential flag as part of the potential B wave and we are sitting on the 100dma. If we close more than 10 points lower tomorrow, then I think we move back to 50/50 probability on whether this is a B wave or really is the big Wave 3 down.

IF its the big wave 3 down. Then this is wave 3 down of 1 down of 3 down. It should be powerful and would take out 1121 pretty fast. Less than 10 trading days.

If this is a B wave, then we'll likely see some bounce tomorrow and we will likely remain inside that Red flag I have drawn. A B wave could retreat as low as 1150, but not lower than 1121 on a close.

Point being, we are left without a concrete idea of where we are at. Which is usually the case, if it was easy the rich people would be the 99%.

What we can do is watch how this trades. As i've mentioned, a 3 of 1 of 3 will be powerful, it will string several very large down days in a row and it will be relentless powerful and broad selling. A simple B wave will just not have that kind of impulse and power. Todays impulse and power is indicitive of a 3 of 1 of 3, but we need to see more strung together.. 1 is not enough.

-----------------------------

A little of my own thoughts on Italy;

Italy is a preview of what is going to happen to the US at some point in the future. With Greece basically toast, the contagion has spread to the next weakest link. The question is whether Italy can survive an assault on its ability to remain solvent. The answer to that is no.. nor would the US. Nor would Spain... nor would the UK... nor would Portugal.

It's like a financial war. If you can be attacked and they know you'll die.. you'll be attacked .. and you will die.

It's all a big chain reaction. Greece goes down.. MF Global goes down.. Jefferies is reeling and cuts its exposure in half.. Blackrock is exposed.. tons of firms are exposed.. they cut holdings.. what does cutting holdings do?? It means they must sell some of their holdings.. which does what? sends yields higher in those countries.. which weakens them more and puts other firms that werent as exposed in pain as the bond prices continue to fall.. more firms must reduce exposure..

That is the downward spiral of a government who has promised too much.

Where things really get ugly is when a few big firms go down because they do not have enough time to reduce exposure. Events like last night can cause that. Italian bonds literally exploding in yield overnight. Margin requirements are sure to be raised, causing you to have no choice but to dump positions or post more cash. It leaves very little time to attempt to reduce exposure. This kind of action is what causes a Bear Sterns or Lehman.

And if another one of those happens again.. ANYWHERE.. not just the US.. if Credit Suisse or Societe General or any of those go boom overnight. It will set off a much more dangerous chain reaction just like the Bear Sterns and Lehman disaster. That of the CDS firecracker chain reaction, that will ripple around the world.

.. be warned though... whats happening in Italy WILL happen to us unless we drastically change our ways in the very near future.

GL

CJ

11.08.2011 -- Closed at a turning point..

The market closed right at some resistance, which is pretty much the norm. If we close more than a few points higher tomorrow, we'll likely go straight to 1310ish.

If we start to sell off, it won't take much to challenge the bottom of the rising wedge again.

-----------------------------

Key Levels

Upside -- 1276, 1285, 1308

Downside -- 1257, 1228, 1198

------------------------------

SPX Daily;

There's our wedge and the potential to expand it. The expansion would be along the intra-day highs as opposed to the closing highs.

It's hard for me to believe those 2 big down days was all there was for wave B of 2. At this point, it is certainly possible and will basically be confirmed if we go any higher than 1282.

The timing of all this has me a bit stumped.

Unless somehow, this Wave 2 manages to stretch out for almost another 2 months before topping, its unavoidable that we begin a dramatic decent right into the holidays.

The only way it could stretch out 2 months is if we are in some kind of triangle pattern for B here that does a ping pong ball bounce between 1217 and 1283 until December and then we hit C of 2 and manage to make that last into January. The only way thats going to happen is if the market really falls into a lullaby here and volitility really drops.

We at least answered 1 question... that we arent in Wave 3 down yet. Its still remotely possible, but we'd need to tank like 100 S&P points in the next week. So, we just have to figure out how to map the rest of this correction.

I don't see how they drag this out til January.. but i've never seen the holidays fail.

GL

CJ

11.07.2011 -- Hidden big wedge?

So I think we had a hidden big rising wedge here for our wave 2 up. Which I think its obvious to most everyone that we are not in the big wave 3 down yet.

The interesting thing is that we are withing a week or 2 maximum for this wedge to finish. But we'll get into that...

-------------------------------------

Key Levels
Upside -- 1262, 1273, 1290-1310

Downside -- 1252, 1228, 1197, some weak support in the 1150-1160 area

-------------------------------------

SPX Daily;

So.. the blue trend on the top is just to show upside resistance from our initial decline.

But there's our big wedge. This had looked like a rising channel, but I had to sort of pick the spots the whole time and was never really super comfortable with it, but it was the only thing that at least fit o.k. This rally has no provied us with a bottom trend that creates a steep bearish rising wedge.

Look how close we are to completing it. We are narrowed to about 35 S&P points of space. We have already had one false breakout.. there may or may not be another. My vote is that there will not be another breakout to the upside.

I give this pattern another 2 weeks max, but it could really break at any time. I believe this is our wave 2 wedge and we are close to done.

IF we use the full 2 weeks.. it is possible that we get another thrust up and do one more fake breakout and maybe touch the 1300-1310 zone for a day or 2. It's possible but not necessary.

I still am very surprised that this market is setting up to have a very very dramatic sell off straight into the holidays. That would be a very rare event.

GL

CJ

11.03.2011 -- Looking like a B wave... but...

This is looking more like a B wave here, which would mean we are about to enter the final move down before yet another rally.

However, it's not dead set, the probability has just swung to the direction of a B wave.

If we were to tank extremely hard and fast tomorrow or Monday, big Wave 3 would still be on the table.

-------------------------

Key Levels

Upside -- 1265, 1290, 1310

Downside -- 1229, 1193, 1180, 1120

-------------------------

SPX Daily;

We are just underneath the top of that channel and just underneath the bollingers that are curling over. The MACD is still floating around extremely overbought levels of the last 5 years and the Stochs are on a sell.

But we rallied hard 2 days in a row.

What happens now? Either way, theres more selling coming in this move, the question is how much. As I mentioned, if this is to be part of the first 5 wave move of a big C wave, we need to tank and tank hard in the next couple days. We are set up for it here.. right near resistance and with volitility rolling very high right now. It just needs to happen.

If the selling doesnt come fast and furious, then it's most likely just a B wave with another strong rally coming that could make an attempt to last the rest of the year.

If this next sell off isn't impulsive and furious, i will be closing my short positions and stepping aside in anticipation of the coming rally.

----------------------------

There's not a lot of other clues here other than volitility is obviously very high right now.

Jefferies today tanked 20% after the open and was halted twice. It then regained most of that loss to only 2% down on the day. Usually though, things don't happen like that for no reason. I suspect there are issues at Jefferies despite todays recovery and they could be yet another MF. Could be exposure to european debt or to MF itself.

Put JEF on your radar screen. If the dominoes start to fall and the firecracker chains start going off.. that could be what kicks off the decline of our big wave 3.

GL

CJ

11.02.2011 -- About to fall apart?

So we got a counter rally today. Its very key what happens next. If this is a big wave 3 down, we will definitely instantly reverse what happened today and proceed to tank and take out the 100, the bottom of the channel and the 50, and all very soon.

If we just slightly pullback tomorrow or continue higher or even sit around and not do much, it will start to add evidence that this is just a B wave and theres still a final potential trip to near or slightly over 1300 remaining.

------------------------

Key Levels

Upside -- 1244, 1268-1273, and 1290-1300

Downside -- 1231, 1220-1215, 1192, then a big drop to 1097 and 1070

------------------------

SPX Daily;

We took out the 100 again to the upside but them rejected the mid-bollingers. Todays trading seemed forced to the upside. It didn't feel impulsive or like shorts covering. It felt weak, like it could fall apart at any time.

The MACD is just rolling over and the Stochs are now on a solid sell.

I think there's more downside coming. The question is just how powerful it is. Taking out the 50dma and getting back down to 1150 could still be a B wave.. so how powerful and fast the decline is will be key to assessing it. A B wave will take some time and have quite a few counter rallies like today and the selling just wont be as powerful. If this is part of a big C down then we should begin tanking again and take out the 50 within a couple days.

I added to my short position today. The futures are down and leaking, we shall see.

GL

CJ

11.1.2011 -- Has "It" begun?

Ugly 2 days, just nasty. We crossed right up over the 200dma for a day, still continuing to rhyme with 2008, and then reversed hard.

Could this be the beginning of the big fall? The one to finish off the great de-leveraging? Yes it could. But, it could also just be the B of an ABC correction still. So, we'll get into how to tell the difference.

---------------------

Key Levels

Upside -- 1229, 1243, 1273

Downside -- 1215, 1190, then air til 1011-1040

---------------------

SPX Daily;

We closed at an important level. Just barely above the bottom of the bollingers and right at the old closing highs before the breakout.

So, is this just a B with another rally thrust coming, or is this a big wave 3 down? How can we tell?

So far, this appears to be a big wave 3 down. The selling is fast, furious, broad and powerful and it's occuring on consecutive days. If this is a big wave 3 down, it will be VERY VERY powerful. If it's just a B, we will see the market lighten up here very soon and start seeing some strong bullish reversals back to the upside. You still will get counter rallies with a big wave 3, but they will come after many multiple days of selling and they will be fast and furious reversals that only last a day or 2 or may even reverse intra-day. If it's a B, we should see the selling more slowly abate and start to see some boring days of the market messing around and acting like the selling is tired.

Here's a way to look at it;

5 days if this is a big Wave 3;

Day 1 - Panic (down 250 on the dow)
Day 2 - Panic (down 200+ on the dow)
Day 3 - Panic (down 400 on the dow)
Day 4 - massive rally until 3, massive sell off into the close
Day 5 - Panic (down 300+ again)

5 days if this is a much much smaller B Wave;

Day 1 - Panic (Down 250)
Day 2 - Panic (Down 250)
Day 3 - Big reversal (Up 220)
Day 4 - screw around, up down up down up down (40 up)
Day 5 - Down (80) selling getting tired.. a big up move is coming

Some other things that will clue us in that this is a big wave 3 down;

1) If we break below the 50dma again here on a close
2) If the big down days just keep stringing together
3) If growth stocks, banks and leaders just don't participate in any rallies
4) If the leadership in the rallies is very very narrow

----------------------

Tomorrow should be a clue.. if we panic sell AGAIN tomorrow.. OR.. if we open higher and then proceed to reverse and panic sell again.. we will look more and more like a big Wave 3 is occuring.

Targets for a B wave -- 1190, then a rally back to the 200dma

Target for a big wave 3 down -- low 700s, potentially by February

GL

CJ

10.31.2011 -- Stocks are spooked

Happy Halloween! Late update tonight due to candy eating and all.

Stocks got spooked today. I didn't think the bear flag from Friday was quite done, but we went ahead and gapped down and broke it on the open today. Will be interesting to see how this pans out here. We should have some questions answered soon.

----------------------

Key Levels

Upside -- 1274, 1311

Downside -- 1245, 1230, 1218, 1188

----------------------

SPX Daily;

Pretty ugly reversal today that closed at the low. You can see we closed in an open pocket there which is why we closed at the low. We need another 12 points south just to hit our first level of support from here and that's just the mid bollingers.

Our bollingers are still pointing up and the 50 and 100dma's are curling up.

I dont think we can really start falling apart until all those things roll back over and are pointing south again. That's not to say we can't just fall right through them all and not stop and then cause them all to turn downwards because of that... we could do just that. But all three of those things will provide stronger support for the market as long as they are all heading north.

MACD is at 23.65. That is the third highest level in the last 10 years.

The other 2 occured just slightly higher at 24.77 and one was at the 2007 high and the other was just after the severe bounce that occured at the 2009 low.

The Stochs are still up above 80 and may start turning down here and flip to a sell.

Its interesting to me that the market got hammered pretty good today but we got very little movement south from the MACD or Stochs.

---------------------------

Other items of note.. the weeklies are still on a buy here but the Monthlies are on a sell like the daily is about to.

To really get moving on the sell side, we'll need to get under 1230 first and then getting under 1188 will put the cherry on top.

GL

CJ

10.27.2011 -- hold... holllllddd.... HOOOLLLDDD...

9:00 p.m. add.. I've changed the settings so that anyone may leave comments without registering with blogger or having a google account. I had a temporary nusance who appears to be gone that caused me to change the settings.

--------------------

In the words of William Wallace in Braveheart.. we are almost there but we are holding... waiting..

Not quite done, but I think we are very close.

Doesn't feel very bearish does it?

----------------------

Key Levels

Upside -- 1300-1306

Downside -- 1274, 1255, 1230, 1209, 1183

----------------------

SPX Daily;

We are in our target zone here. I've increased my position to 30% short now. I will top out at 50% short here soon with anything over 1300.

If you got back several posts, you will remember that I posted that it will seem like all is clear and everything looks awfully bullish and most shorts will get squeezed out of the market. All the while, moving so fast that it would have been difficult to get long.

That is the nature of the bear. It burns both bulls and bears.

These are the times you must trust all the analysis that you've done and stick with your plan and execute.

Of course I must have a stop loss/breaking point. Mine here, is if we take out 1325 and/or we spend more than 2 weeks closing above the 200dma. Then I may close this position and take a step back.

That is the prize for the patience of waiting, .. if I'm wrong, then the pain won't be tremendous, as long as I admit i'm wrong withing a reasonable time and within my limits.

I don't think i'm wrong though.

Bradley turn date tomorrow, other fibonacci time relationships.

The MACD is at 21.. which is right in the zone of all major tops on the MACD in the last 5 years. The stochs are still rolling up above 80. The short term charts (30 min and hourlies) are tremendously overbought.

Elliott Wave tells us very bad news is coming soon. Who knows what.. reversal of the greek bailout, a larger country rolling over, a tsunami, a volcanoe.. who knows.. but something is coming and soon.

GL

CJ

10.26.2011 -- A little clearer each day

Nothing earth shattering today, trading was pretty technical. The rally today though is probably eliminating the possibility that we are in wave 5 down. The only way for that count to stay alive is if we really fall off a cliff here in the next day or 2.

--------------------

Key Levels

Upside -- 1257, 1274

Downside -- 1229, 1223, 1207, 1181, 1134

--------------------

SPX Daily;

You can see there the market traded pretty technical today. We broke down into the channel and then bounced off the mid-bollingers and managed to get back through resistance and closed positive.

We did wear down support though at the top of the channel and 100dma.

Only other thing of note is that the MACD is now at 17.45.. this is above 5 points off the highest levels its been going back 5 years. 21-23 seems to be a very popular top for the MACD in recent history. The Stochs are also very overbought here and have been.

Turn dates approach. 200dma is within 30 S&P points.

GL

CJ

10.25.2011 -- Pull back or rally over..

Pretty ugly day overall with earnings, AH too with AMZN. Banks took a whacking and so did a lot of growth leaders. Volume was overall on the light side though.

-------------------

Key Levels

Upside -- 1237, 1274

Downsie -- 1227-1230, 1221, 1204, 1180, 1136

-------------------

SPX Daily;

We threatened today to make this breakout of the 100dma be a fake out. We are sitting just over the 100 and the old channel.

Still extremely overbought on the Stochs and approaching extremely overbought on the MACD. (Long term, on a 5 year chart, MACD never exceeds 23 with these settings and we are at 16)

Key will be whether we dip back down into this channel and below the 100 again here this week. I think we will, but we'll see.

---------------------------

From an Elliot Wave prespective, there's 2 options here.

1) Most have moved on that we finished the first major wave down (5 waves down off 1372) and are now in a counter-trend rally, an ABC correction of that move down. IF that is the case, then you would conclude that we have likely finished A, possibly finished B and this is a quick pullback before charging ahead yet again to finish C up of the correction.. OR we just finished A and today was the start of B down of the A up, B down, C up correction. In which case, the coming C up after B down would likely get to the 200dma and probably exceed it for a short time before finishing.

2) the scenario not many are considering.. That the 1077 bottom was only the bottom of Wave 3 down of 1 down and we just finished Wave 4 up and are now embarking on Wave 5 down and are just now starting the last wave down to complete the first major 5 wave down pattern.

......

I like option 2 for several reasons...

1) it fixes the timing problem. That means we are going to collapse again right now and probably take out 1077 and then bottom for the first major 5 wave structure and THEN start the counter-trend rally that we all believe we are in now. That would allow for the usual christmas rally.

2) It would burn a lot of people on both sides.. bull and bear.. Bears wouldnt see a move coming right now to the low 1000's or high 900's that started today. And they definitely wouldn't see yet another rally to the 200 occuring after that. Bulls would once again watch everything melt before their eyes and it would be difficult to believe the market could stage yet another rally.

3) It would actually just be a cleaner count if it went down that way.

---------------------

We shall see.. option 2 would move quite a few people backwards who have moved forward way past that spot.. but the market has appeared to move so quickly that it just may make sense.

GL

CJ

10.24.2011 -- Happy bull joy

I clearly remember the counter rally to the 200dma in 2008. The 2 markets look extremely technically similar.

-------------------

Key Levels

Upside -- 1274.. really nothing stopping us from getting there other than being very very very overbought at the moment

Downside -- 1231, 1217, 1200, 1181, 1121

-------------------

SPX Daily;

There's our target zone. We are over that 1250 mark. 1274 is the 200dma.. We have a possible spike wash and bull trap up to 1290ish.

Feels pretty damn bullish doesn't it? Thats what these things do. Rip and burn.

---------------------

There's a significant fibonacci time cluster and Bradley turn date through the rest of this week.

Obviously it's going to be some kind of top. Just not sure if it will be THE top of this yet or just a little blip down to reload for the rest of the run north.

Because of the expected power of the next major downmove, it will be fairly obvious which one it is once we start to reverse.

I think the obvious guess is that Europe is going to disappoint the world this week.. but something could come out of left field..

The biggest thing that bothers me about all this is that our countertrend rally has moved so tremendously fast that the timing leaves no other option except the market crashing into the holidays...

very odd timing..

we'll see..

GL

CJ

10.20.2011 -- News driven or noise?

Not much changed today, but I do have something to show you of interest.

------------------------

Key Levels

Upside -- 1222, 1223, 1274

Downside -- 1201, 1184, 1177

-------------------------

SPX Daily (3 months)

So we were tanking in the morning and then a report came out that the German government spokesman was going to make an announcement about the ESFS around noon.

The market immediately reversed after that news and continued higher all the way until 1:30, the news was simply that any decision was being pushed until next week, the market sagged just a bit and then kept moving higher.

It's easy to say that all that was gyrations based on yappty yap yap coming out of Euro land.

But if you look at the chart. Look where the market bottom and reversed. Exactly pinpoint at the top of our channel.

Is it just coincidence that the news of the ESFS announcement came just as the market hit that point and reversed? Or can you really just find any piece of news and say that's what moved the market?

Does any of it really matter, or is it all just noise as the market will ultimately follow the path it is going to anyways?

Long term Elliot Wave analysis no matter how you count it, strongly points to us hitting S&P 500 or lower sometime in 2012, maybe 2013.

If you eliminate all the noise in the middle.. lets see how predictible the market really is.

GL

CJ

10.19.2011 -- Hovering...

We are still stuck in the same area we were yesterday. The daily stochs and MACD appear to be rolling over though.

---------------------

Key Levels

Upside -- 1224-1235, 1275

Downside -- 1209, 1198, 1175, 1138

----------------------

SPX Daily;

Here we have our 2 channels or wedge depending on how you want to draw it.

I THINK we are finally about to pullback a decent amount. You can see the bollingers are rolling over, the MACD is rolling over and the Stochs are rolling over. In a raging bull market, sometimes those signals are tricky and will roll gently along the top while the market keeps churning ahead, but in this case, I think it signals pullback time.

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Our growth leaders followed up their flat day yesterday with pretty good sell offs today.

AMZN, AAPL, CMG, LULU, PCLN, NFLX.. all down pretty good.

Nothing much else significant.. just watch for reports of euro shitting bond eating cows to be genetically engineering in Europe. News like that could be released at any minute.

GL

CJ

10.18.2011 -- Intentionally blank...

I'm not even going to hazard a guess what this market is going to do right now.

but.. Apple missing earnings may have sealed the short term fate, which will look a lot like the long term fate. The mid-term though is where things could go a bit crazy.

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Key Levels

Upside -- 1233, 1235, 1275

Downside -- 1200, 1191, 1174, 1165 (below 1165 has only one pit stop to 1077)

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SPX Daily;

We are stuck in a trading zone above the old channel and below the 100dma and old intra-day highs.

Todays close was not higher than the close 2 days ago.

Apple also missed earnings.

I have to think we are probably going to dip back into the channel and get our pullback now. But this market is psycho.. so who knows.. Europe might announce they found a field of mutant cows that eat bonds and shit euros.

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The mid-term is where things get hairy. Obviously after this pullback, we are likely to shoot higher. Where we stop is the question. I suspect somewhere between 1265 and 1325. Possibly closer to 1325.

Again, very dependent on news.. news doesn't change the outcome, but it can dramatically shift how we get there in the middle.

I got very slightly short at that last ramp to 1225. I will stay that way and hope to get shorter slowly as we cross 1250 and higher.

There tough part is we never really hit my buy target of 1040. Is 1077 close enough? Is this really wave 2 up?

Difficult questions at the moment, and hopefully will be answered when we get this pullback.

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Of note..

AMZN, LULU, PCLN, CMG, NFLX, etc... all down or flat today.

GL

CJ

10.17.2011 -- How big of a sell off...

I typed up a pretty decent analysis and blogger decided to error out and erase the whole thing.

Not happy.

So short version... sorry.

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Key Levels

Upside -- 1205, 1225, 1236

Downside -- 1181, 1172, 1150

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SPX Daily;

Multiple ways to draw any channel/flag/wedge we may be in. There's also multiple possible Elliott wave counts.

We got a good red reversal candle today though, so we seem very likely to pull back here.

How far we pull back and how strong the sell off is should clear up some things and answer a few questions. It will at the very least eliminate a possbility or 2.

I expect further selling to at least 1172, but most likely further than that.

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IBM is not happy after hours. Neither is CROX.

IBM though is one of the few stocks that was leading north on the "Global Growth" story, which I have read as "Global Debt Binge" story.

IBM is far above it's previous all time highs in 2007.

If we start getting more breakdowns in leaders at all time highs like IBM, this market will have real issues. IBM isn't the first either, CAT has recently broke down badly and was also riding the global pulled forward demand to new highs.

The DOW could be in trouble here.

GL

CJ

10.13.2011 -- Same Ish different day..

We closed right below the top of the bear flag yet again. Shocker.

Not a whole lot to report today. We are either going to make a run at the bottom of it here very soon, or we're going to try to breakout north.

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Key Levels

Upside -- 1205, 1221, 1238, 1276

Downside -- 1191, 1172, 1162, 1126-1132

Again resistance on the upside is strong and support on the downside is weak.

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SPX Daily;

Still riding the top of this flag. We printed a small reversal hammer, so there's definitely a chance that we are about to turn back down to test the bottom of the flag again.

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Financials took a whacking today on the heels of JPM's thickly veiled not so good earnings. I suspect we won't see anything good from any of them this quarter. or next quarter.. or the one after that.

Its still a mine field, walk gently.

GL

CJ