08.08.2011 -- Crash or dash.. pick one..

We are either going to completely fall apart here and do a 1987 swan dive to who knows where... or we are going to find a low here soon and have a rip roarer of a rally.

Key Levels;

Upside -- 1193, 1255

Downside -- 1080's ish, 1068, 1037

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

SPX daily ( I had to back out to 25 years to find where a bounce might come trendline wise)

These are 2 long term trend lines that exists since the early 80's. These will be 2 areas of powerful support. 1 is only about 20-30 points below where we are right now.

Because of the severity of this plunge though, there's really no telling when we might suddenly reverse and rip higher.

The risk of a 1987 style crash exists here. The levels of support are very spread apart here and we appear to be in the bottom part of a parabolic sell off.

Between where we are right now and 1068, there are definitely long term support lines. Powerful ones. Pinpointing them is difficult because changing how you draw the line ever so slightly can result in a 20 point change in target. So it makes for a range... here to 1068 is definitely a range of major support.

Below that gets hairy (as if this isn't hair enuogh already).. theres sort of an airpocket from there to the 800s on the S&P.

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

At this point, theres almost no way to avoid a death cross. The spread of the 50 to 200dma was 10 points this morning. We'll probably get a cross by Thursday, even if we have a violent bounce.

So whether this market has a violent bounce here... or we just continue this plunge and crash 1987 style... one way or the other... we are now in a bear market and it's going to get ugly.

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

The market is forward looking by 6 months to a year or so. Meaning, its predicting whats going to happen in the economy anywhere from 6 months to 12 months from now.

Obviously, this means things are going to look significantly worse heading through the beginning of next year.

There will be some bank closures, the unemployment rate is probably going much higher, and overall standard of living is going to come down.

I suggest you assume these things will happen and take appropriate steps in your life.

GL

CJ