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Key Levels
Upside -- 1210, 1243, 1250
Downside -- 1170, 1142, 1121 and 1102
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Why is it a pullback?
I'm seeing the same patterns we've seen for the last 2 years that have occured when the market is just pulling back and in a bullish phase, rather than being in a bearish sell off phase.
1) The momo stocks were mostly UP today despite the broader sell off. LULU was up, CMG was up, PCLN only took a pin prick down, AAPL was up. You should always keep the current set of momo stocks in your quote list, as they often say something about current action. The 2007 momo list was the 4 horsemen via Cramer if you were around at the time. RIMM, AMZN, AAPL and GOOG. Those 4 stocks really crumbled when the real sell off in 2008 began.
2) One index that has defied the odds and gravity and has been a consistent sign is DOW Jones Real Estate. aka... IYR. IYR held up well today. Small caps got crushed but IYR just took a relative pin prick. This is another pattern i've seen over and over and over.
3) We closed out the day on a sell off but did not take out the lows. Closing at the lows seems to be fairly consistent during the selloffs that really gain steam.
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Not much changed from yesterdays daily, so here's an hourly of the SPX;
Here's our channel again up close. I do think we have a date with the top of that channel again and I think we'll like have a fake breakout over top before the next big move down.
That said, you can see on the hourlies that we are still overbought and heading down on the Stochs.. so we may get some more pause time tomorrow. Don't expect tomorrow to be a big day either way... calm consolidation. Next week may be a bit of a big pop north to challenge the top of this channel and put us in range of our targets to short.
If we happen to suddenly collapse (because anything is possible in this environment), it must be respected if we take out the 1121 to 1102 area to the downside.
GL
CJ
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