11.21.2011 -- Another big sell off..

The big sell offs are starting to stack up here. But, we still really can't say this market is done rallying unless we take out 1121.

We finished today at the bottom of a new channel which is what our previous flag has morphed into.

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Key Levels

Upside -- 1207, 1223, 1237, 1262

Downside -- 1193, 1121

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SPX Daily;

Heres our new channel for the moment. However, we are already sitting at the very bottom of it. We had broken that support intra-day and managed to close back above it.

I'm still considering this a B wave. Its obviously going to cut lower, but I still think the highest probability is that there is another rally left in this market.

The good news is that there's cut offs where we can say that idea is dead. That for me is if this market keeps having sell offs like today within a short period of time and takes out 1121 to the downside. That will mean bad things for this market.

This market loves to confuse.. so I expect the 1121-1140 level to be tested (even if only intra-day).

Another thing to note is that we have burned off almost all the overbought levels in this market. Notice that the MACD is almost negative again and the stochs aren't far from dipping under 20. Like always though, oversold can become more and more and more oversold.. so don't take anything from that other than the potential for another rally is there and be aware of it.

GL

CJ