09.12.2011 - Held the channel

It was dicey, certainly was doubting my position today for a bit, but we held the corrective channel.

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Key Levels

Upside -- 1165, 1185, 1210

Downside -- 1148, 1135, 1102

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The market looked toast today, but that was one hell of a late day rally.

Here's the chart;

Few things in this chart. We had obviously penetrated the corrective channel during the day, but then reversed hard and closed well back into it.

We also printed a reversal hammer candle. A green candle and in this case is probably a bullish reversal hammer.

We still have quite a bit of MACD to correct to get back to a slightly positive number we want to see in order for the market to look primed for a fall again. The Stochs also look like they may turn back up here near the halfway mark.

Another thing in the bulls favor is that the next 2-3 weeks are heading into end of quarter. You have to assume there will be an effort made to make those 401k statements look not quite as horrific and keep the sheeple in the market for as long as they can.

We could of course just tank on some greek debt news or european bank explosion... but things left to themselves without intervening news and I think we are prepping for that hard run at 1260 right about now.

It will be a wonderful opportunity to get short this market. You must be patient and wait for your target. Then you must be patient and sit through some violence until the turn back down comes. Much like we have been sitting through violence waiting for the real turn back up to come.

We are setting up for the months of October and November to potentially be disasterous.

Could they push it off til January? .. it's possible.. but I doubt it.

Either way... D day is getting closer. Make sure your families finances and such are in order and ready for a very very very rough patch. By that I mean, a lot of jobs will be lost again. Deflation may set in.. debts may become very difficult to pay off. If you are sitting on a family situation requring 2 full time jobs to pay for your lifestyle and a bunch of debt, you are not in a good situation right now.

GL

CJ