Monday, October 3, 2011

10.03.2011 -- We have broke lower

Ugly day for the market. That late sell off right into the bell really just cemented the fact that we are going lower.

Can we bounce? sure.. maybe even tomorrow. Go back up and touch the old support from underneath. We could just tank straight down too.

Looks like our target is probably in the 1010-1040 range.

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

Key Levels

Upside -- 1121, 1124, 1151, 1178

Downside -- to be honest... i don't see anything til 1044

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

SPX Daily (6 month)


I'm sure most of you have seen this already. We have a new low on both an intra-day and closing basis. It just poked below the previous intra-day low, but in this case considering the intra-day low was such a big tail, I think that was plenty enough to confirm we are going lower.

Wave 5 down of 1 down of Supercycle C down is here and moving.

We could bounce at any time. We are also in a 5th wave, so you have to be careful about getting a big fat reversal in your face. The way we traded today though leads me to believe that we are going to go to the full extent of this wave 5 and hit our target zone of 1015-1040.

SPX weekly for the target;


I would guess that we are going to form yet another big H&S over time through Xmas and then start falling off the right shoulder and start plunging in January and February.

If that's the case, we'll bottom this 5th in our target zone and form the neckline and should have plenty of time to rally slowly all the way back up for our wave 2 of Supercycle C and top around or sometime right after Xmas.

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

I'm sure most of you also saw or read about the ugly in the nuclear land of CDS today. It's ugly out there.. the banks are starving for liquidity. It's only going to take one. Just like Lehman. You set off the CDS cluster bomb and it's like a horrible chain reaction of death.

Because of this fact.. because of whats going on in the credit markets both here and in Europe..

It IS possible we just outright crash here. Because of that possibility, I have shorted this market on this break with a stop on it back above old support. It's not a big position, but I don't want to miss out if we crash here.

If we dont crash, there's going to be a awesome buying opp here in that 1015-1040 range.

Put yer helmets on..

GL

CJ

No comments: