11.29.2011 -- BOO!!! cover your shorts!

Alright,.. first a disclaimer.. could this be the C wave I was talking about before when we had 2 possible elliot wave counts and we needed one more big rally before the collapse?.. yes it could. We could certainly take one more big rally north and it would work out time wise as we would close out the year strong and head possibly into the mid-1300's by mid January.

Is this possible? Yes.

Do I think that will happen? No.

The market is trading like a bear market. Bear market rallies are furious and powerful, and this would be the time of year to do it, but the market sentiment just doesn't support it.

I've been at this for a long time and I really feel like these past 2 days are nothing but a trick to get you to either go long a bounce, cover your shorts or just get into a "trading" the market mode rather than just sit on your position and let it happen.

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Key Levels

Upside -- 1202, 1215, 1230, 1266

Downside -- 1172, 1121

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SPX Daily

So here we are.. we rallied up to resistance at both the 50dma and mid-bollingers and then sold off right back to the edge of the channel.

Let me just say... closing back into that channel will be a death blow for the market short term.

The Stochs support some rally time, but on the daily.. we rarely get a perfect roll off the bottom and head north or the opposite with a roll off the top. We will almost always roll on the bottom or top for a long time before changing direction.

Long story short.. I feel this is a trick.. I feel i've played this game before. I feel like after 15 years of watching this game play out that i've seen this move and its bait on a hook.

Could we do the seasonal rally and fit the wave C EW count and all fall perfectly into place? Yeah..

I just don't think its happening this particular year.

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What to watch..

If we get back above the 100dma on a close and stay there for more than 2 days.. then I will strongly consider the option that we are going to rally into year end.

Otherwise, i think this market has some major selling to do.


GL

CJ