09.14.2011 -- Trading technically perfect...

Some people today seemed to think that this was a mystery rally with violent moves out of nowhere and a market that seems bi-polar.

I will argue here with clear evidence that it is in fact a market that traded techncially perfect today.

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Key Levels

Upside -- 1200, 1232, 1250

Downside -- 1181, 1158-1163, 1137, 1102

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Again tonight, straight to the chart;

SPX Daily;

(click to enlarge in case anyone didnt know)

Take a look at todays candle.

First, we rallied as expected. We had the reversal hammer print a couple days ago and we spent 2 days closing back into the corrective channel and then back into the bollingers.

Today we simply traded the entire range of the bollingers. Nothing more. No mystery, no craziness.

We opened up and then traded straight down to the bottom of the bollingers. During which time we burned off the very short term overbought levels. Then we resumed the climb and went all the way to the exact top of the bollingers. When we hit that about an hour before the close, we sold back off, once again burning off short term overbought levels.

We traded the top and bottom of the bollingers to a fraction of a point folks.

Excellent trading opportunity.

If you've been following me long enough, you know how much value I put into the daily bollingers and today they proved it.

That sell off at the end of the day was nothing sinister, it was simply smacking that wall at the top of the bollinger and coming back down. We most likely will continue to rise. As soon as those bollingers, especially the mid-bollinger line (the dashed line) starts turning back up into an upward slope, that's when the market will find it support and take a launch north here.

Target for me is still 1260-1300.

We seem to be moving quickly, so I'm going to put that target sometime in October and we have a late October crash. But obviously that timing can change. We'll just have to see how it plays out.

Watch those daily bollingers folks. They are important, they mean something. (old school UHF reference for any wierd Al fans.. I know there are very few of us..haha) For those of you that don't get it.. watch the movie "UHF", if you like dumb but funny movies, it's a classic.

GL

CJ