10.17.2011 -- How big of a sell off...

I typed up a pretty decent analysis and blogger decided to error out and erase the whole thing.

Not happy.

So short version... sorry.

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Key Levels

Upside -- 1205, 1225, 1236

Downside -- 1181, 1172, 1150

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SPX Daily;

Multiple ways to draw any channel/flag/wedge we may be in. There's also multiple possible Elliott wave counts.

We got a good red reversal candle today though, so we seem very likely to pull back here.

How far we pull back and how strong the sell off is should clear up some things and answer a few questions. It will at the very least eliminate a possbility or 2.

I expect further selling to at least 1172, but most likely further than that.

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IBM is not happy after hours. Neither is CROX.

IBM though is one of the few stocks that was leading north on the "Global Growth" story, which I have read as "Global Debt Binge" story.

IBM is far above it's previous all time highs in 2007.

If we start getting more breakdowns in leaders at all time highs like IBM, this market will have real issues. IBM isn't the first either, CAT has recently broke down badly and was also riding the global pulled forward demand to new highs.

The DOW could be in trouble here.

GL

CJ