11.28.2011 -- Scare the shorts off the shorts

Big jump today. It didn't really get anywhere though except back inside the bollingers. Despite the big move, we didn't take out any important areas of resistance. In short, it was a big rally off very oversold conditions after closing on the bottom of the short term channel we were watching last Friday.

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Key Levels

Upside -- 1205, 1210, 1218, 1240, 1266

Downside -- 1174, 1150, 1121

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SPX Daily;

Heres a larger down channel. We have fallen into it and then todays rally burned off some oversold and rallied us right back to the top edge.

We may poke back out here.. but I suspect we stop at some of the resistance directly overhead and then violently head back south into this channel. The target at that point would be over 100 points lower.

Remeber folks, this is not how a bull market trades. A bull market will add 8 points to the S&P 21 times in a row. Just grind and grind and grind and eat up time and make you think that any minute now it will reverse because its been up for 15 days in a row. That is not this market.. this is how bear markets work. Moves to the extremes burning both shorts and longs out of their positions.

Too much debt cannot be bailed out with more debt. Printing will eventually destroy your economy, it only delays the ultimate end.

Despite the daily news and headline risk.. this market is trading just like any other classic bear market. It just appears to be whipsawed by daily news. It will eventually travel to exactly where it intends to and already knows its going. The rest is just noise.

S&P 400 within 3-4 years folks. Continue preparing yourselves for a very very difficult economy. Get out of as much debt as quickly as you can.

GL

CJ