10.31.2011 -- Stocks are spooked

Happy Halloween! Late update tonight due to candy eating and all.

Stocks got spooked today. I didn't think the bear flag from Friday was quite done, but we went ahead and gapped down and broke it on the open today. Will be interesting to see how this pans out here. We should have some questions answered soon.

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Key Levels

Upside -- 1274, 1311

Downside -- 1245, 1230, 1218, 1188

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SPX Daily;

Pretty ugly reversal today that closed at the low. You can see we closed in an open pocket there which is why we closed at the low. We need another 12 points south just to hit our first level of support from here and that's just the mid bollingers.

Our bollingers are still pointing up and the 50 and 100dma's are curling up.

I dont think we can really start falling apart until all those things roll back over and are pointing south again. That's not to say we can't just fall right through them all and not stop and then cause them all to turn downwards because of that... we could do just that. But all three of those things will provide stronger support for the market as long as they are all heading north.

MACD is at 23.65. That is the third highest level in the last 10 years.

The other 2 occured just slightly higher at 24.77 and one was at the 2007 high and the other was just after the severe bounce that occured at the 2009 low.

The Stochs are still up above 80 and may start turning down here and flip to a sell.

Its interesting to me that the market got hammered pretty good today but we got very little movement south from the MACD or Stochs.

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Other items of note.. the weeklies are still on a buy here but the Monthlies are on a sell like the daily is about to.

To really get moving on the sell side, we'll need to get under 1230 first and then getting under 1188 will put the cherry on top.

GL

CJ

10.27.2011 -- hold... holllllddd.... HOOOLLLDDD...

9:00 p.m. add.. I've changed the settings so that anyone may leave comments without registering with blogger or having a google account. I had a temporary nusance who appears to be gone that caused me to change the settings.

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In the words of William Wallace in Braveheart.. we are almost there but we are holding... waiting..

Not quite done, but I think we are very close.

Doesn't feel very bearish does it?

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Key Levels

Upside -- 1300-1306

Downside -- 1274, 1255, 1230, 1209, 1183

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SPX Daily;

We are in our target zone here. I've increased my position to 30% short now. I will top out at 50% short here soon with anything over 1300.

If you got back several posts, you will remember that I posted that it will seem like all is clear and everything looks awfully bullish and most shorts will get squeezed out of the market. All the while, moving so fast that it would have been difficult to get long.

That is the nature of the bear. It burns both bulls and bears.

These are the times you must trust all the analysis that you've done and stick with your plan and execute.

Of course I must have a stop loss/breaking point. Mine here, is if we take out 1325 and/or we spend more than 2 weeks closing above the 200dma. Then I may close this position and take a step back.

That is the prize for the patience of waiting, .. if I'm wrong, then the pain won't be tremendous, as long as I admit i'm wrong withing a reasonable time and within my limits.

I don't think i'm wrong though.

Bradley turn date tomorrow, other fibonacci time relationships.

The MACD is at 21.. which is right in the zone of all major tops on the MACD in the last 5 years. The stochs are still rolling up above 80. The short term charts (30 min and hourlies) are tremendously overbought.

Elliott Wave tells us very bad news is coming soon. Who knows what.. reversal of the greek bailout, a larger country rolling over, a tsunami, a volcanoe.. who knows.. but something is coming and soon.

GL

CJ

10.26.2011 -- A little clearer each day

Nothing earth shattering today, trading was pretty technical. The rally today though is probably eliminating the possibility that we are in wave 5 down. The only way for that count to stay alive is if we really fall off a cliff here in the next day or 2.

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Key Levels

Upside -- 1257, 1274

Downside -- 1229, 1223, 1207, 1181, 1134

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SPX Daily;

You can see there the market traded pretty technical today. We broke down into the channel and then bounced off the mid-bollingers and managed to get back through resistance and closed positive.

We did wear down support though at the top of the channel and 100dma.

Only other thing of note is that the MACD is now at 17.45.. this is above 5 points off the highest levels its been going back 5 years. 21-23 seems to be a very popular top for the MACD in recent history. The Stochs are also very overbought here and have been.

Turn dates approach. 200dma is within 30 S&P points.

GL

CJ

10.25.2011 -- Pull back or rally over..

Pretty ugly day overall with earnings, AH too with AMZN. Banks took a whacking and so did a lot of growth leaders. Volume was overall on the light side though.

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Key Levels

Upside -- 1237, 1274

Downsie -- 1227-1230, 1221, 1204, 1180, 1136

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SPX Daily;

We threatened today to make this breakout of the 100dma be a fake out. We are sitting just over the 100 and the old channel.

Still extremely overbought on the Stochs and approaching extremely overbought on the MACD. (Long term, on a 5 year chart, MACD never exceeds 23 with these settings and we are at 16)

Key will be whether we dip back down into this channel and below the 100 again here this week. I think we will, but we'll see.

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From an Elliot Wave prespective, there's 2 options here.

1) Most have moved on that we finished the first major wave down (5 waves down off 1372) and are now in a counter-trend rally, an ABC correction of that move down. IF that is the case, then you would conclude that we have likely finished A, possibly finished B and this is a quick pullback before charging ahead yet again to finish C up of the correction.. OR we just finished A and today was the start of B down of the A up, B down, C up correction. In which case, the coming C up after B down would likely get to the 200dma and probably exceed it for a short time before finishing.

2) the scenario not many are considering.. That the 1077 bottom was only the bottom of Wave 3 down of 1 down and we just finished Wave 4 up and are now embarking on Wave 5 down and are just now starting the last wave down to complete the first major 5 wave down pattern.

......

I like option 2 for several reasons...

1) it fixes the timing problem. That means we are going to collapse again right now and probably take out 1077 and then bottom for the first major 5 wave structure and THEN start the counter-trend rally that we all believe we are in now. That would allow for the usual christmas rally.

2) It would burn a lot of people on both sides.. bull and bear.. Bears wouldnt see a move coming right now to the low 1000's or high 900's that started today. And they definitely wouldn't see yet another rally to the 200 occuring after that. Bulls would once again watch everything melt before their eyes and it would be difficult to believe the market could stage yet another rally.

3) It would actually just be a cleaner count if it went down that way.

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We shall see.. option 2 would move quite a few people backwards who have moved forward way past that spot.. but the market has appeared to move so quickly that it just may make sense.

GL

CJ

10.24.2011 -- Happy bull joy

I clearly remember the counter rally to the 200dma in 2008. The 2 markets look extremely technically similar.

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Key Levels

Upside -- 1274.. really nothing stopping us from getting there other than being very very very overbought at the moment

Downside -- 1231, 1217, 1200, 1181, 1121

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SPX Daily;

There's our target zone. We are over that 1250 mark. 1274 is the 200dma.. We have a possible spike wash and bull trap up to 1290ish.

Feels pretty damn bullish doesn't it? Thats what these things do. Rip and burn.

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There's a significant fibonacci time cluster and Bradley turn date through the rest of this week.

Obviously it's going to be some kind of top. Just not sure if it will be THE top of this yet or just a little blip down to reload for the rest of the run north.

Because of the expected power of the next major downmove, it will be fairly obvious which one it is once we start to reverse.

I think the obvious guess is that Europe is going to disappoint the world this week.. but something could come out of left field..

The biggest thing that bothers me about all this is that our countertrend rally has moved so tremendously fast that the timing leaves no other option except the market crashing into the holidays...

very odd timing..

we'll see..

GL

CJ

10.20.2011 -- News driven or noise?

Not much changed today, but I do have something to show you of interest.

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Key Levels

Upside -- 1222, 1223, 1274

Downside -- 1201, 1184, 1177

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SPX Daily (3 months)

So we were tanking in the morning and then a report came out that the German government spokesman was going to make an announcement about the ESFS around noon.

The market immediately reversed after that news and continued higher all the way until 1:30, the news was simply that any decision was being pushed until next week, the market sagged just a bit and then kept moving higher.

It's easy to say that all that was gyrations based on yappty yap yap coming out of Euro land.

But if you look at the chart. Look where the market bottom and reversed. Exactly pinpoint at the top of our channel.

Is it just coincidence that the news of the ESFS announcement came just as the market hit that point and reversed? Or can you really just find any piece of news and say that's what moved the market?

Does any of it really matter, or is it all just noise as the market will ultimately follow the path it is going to anyways?

Long term Elliot Wave analysis no matter how you count it, strongly points to us hitting S&P 500 or lower sometime in 2012, maybe 2013.

If you eliminate all the noise in the middle.. lets see how predictible the market really is.

GL

CJ

10.19.2011 -- Hovering...

We are still stuck in the same area we were yesterday. The daily stochs and MACD appear to be rolling over though.

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Key Levels

Upside -- 1224-1235, 1275

Downside -- 1209, 1198, 1175, 1138

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SPX Daily;

Here we have our 2 channels or wedge depending on how you want to draw it.

I THINK we are finally about to pullback a decent amount. You can see the bollingers are rolling over, the MACD is rolling over and the Stochs are rolling over. In a raging bull market, sometimes those signals are tricky and will roll gently along the top while the market keeps churning ahead, but in this case, I think it signals pullback time.

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Our growth leaders followed up their flat day yesterday with pretty good sell offs today.

AMZN, AAPL, CMG, LULU, PCLN, NFLX.. all down pretty good.

Nothing much else significant.. just watch for reports of euro shitting bond eating cows to be genetically engineering in Europe. News like that could be released at any minute.

GL

CJ

10.18.2011 -- Intentionally blank...

I'm not even going to hazard a guess what this market is going to do right now.

but.. Apple missing earnings may have sealed the short term fate, which will look a lot like the long term fate. The mid-term though is where things could go a bit crazy.

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Key Levels

Upside -- 1233, 1235, 1275

Downside -- 1200, 1191, 1174, 1165 (below 1165 has only one pit stop to 1077)

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SPX Daily;

We are stuck in a trading zone above the old channel and below the 100dma and old intra-day highs.

Todays close was not higher than the close 2 days ago.

Apple also missed earnings.

I have to think we are probably going to dip back into the channel and get our pullback now. But this market is psycho.. so who knows.. Europe might announce they found a field of mutant cows that eat bonds and shit euros.

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The mid-term is where things get hairy. Obviously after this pullback, we are likely to shoot higher. Where we stop is the question. I suspect somewhere between 1265 and 1325. Possibly closer to 1325.

Again, very dependent on news.. news doesn't change the outcome, but it can dramatically shift how we get there in the middle.

I got very slightly short at that last ramp to 1225. I will stay that way and hope to get shorter slowly as we cross 1250 and higher.

There tough part is we never really hit my buy target of 1040. Is 1077 close enough? Is this really wave 2 up?

Difficult questions at the moment, and hopefully will be answered when we get this pullback.

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Of note..

AMZN, LULU, PCLN, CMG, NFLX, etc... all down or flat today.

GL

CJ

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

10.13.2011 -- Same Ish different day..

We closed right below the top of the bear flag yet again. Shocker.

Not a whole lot to report today. We are either going to make a run at the bottom of it here very soon, or we're going to try to breakout north.

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Key Levels

Upside -- 1205, 1221, 1238, 1276

Downside -- 1191, 1172, 1162, 1126-1132

Again resistance on the upside is strong and support on the downside is weak.

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SPX Daily;

Still riding the top of this flag. We printed a small reversal hammer, so there's definitely a chance that we are about to turn back down to test the bottom of the flag again.

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Financials took a whacking today on the heels of JPM's thickly veiled not so good earnings. I suspect we won't see anything good from any of them this quarter. or next quarter.. or the one after that.

Its still a mine field, walk gently.

GL

CJ

10.12.2011 -- Still in the bear flag

We are still in the bear flag, things could really go either way. There's several possible Elloitt wave counts, so that is currently of no help. I like Daneric's count the best currently on his site.

http://danericselliottwaves.blogspot.com/

We are still waiting for our spot here. I still think scaling in short over 1240 up to as high as 1290 will be an excellent short opportunity or buying in the low 1000's will be a good long opportunity. We just have to wait and see which way the market choses to go.

Again, I must remind you, don't play in the mine field, you could blow your leg off.

The above said, we are probably due for a pullback here that will either consolidate and then breakout to the 200dma or we reverse hard and head straight down to the low 1000's. I'm guessing just a pullback right now.

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Key Levels (S&P Cash)

Upside -- 1210, 1239, 1276

Downside -- 1190, 1173, 1157

Support on the downside is weak.. resistance on the upside is strong.

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SPX Daily;

Not much to say here. We almost broke out of the bear flag/trading range, but then reversed (which was very predictable) and closed back inside.

We have rallied 13.6% from bottom to top in a weeks worth of trading.

Let me just note.. bull markets don't do things like that. They grind slowly for a long period of time. They don't rally 13% in 5 days.

It appears we will pullback here, maybe we'll take another shot at a breakout but I doubt it.

I bought my first small lot short today. A tiny scale in near the high at 1220. I knew we were knocking on resistance. It's below my target zone, but i wanted to get my feet just a little wet. I don't want to be left empty handed if this titanic suddenly strikes an iceberg.

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I posted this on the forums today. ( www.tickerforum.org )

SPX 5 year

It's a comparison of the 2008 top and what is occuring now. It's uncanny how similar they are.

If we continue to rhyme with that pattern, the market is set to plunge after this current rally ends somewhere around the 200dma(1274 currently).

If nothing else, it's very interesting.

Maybe the introduction of so many algo trades and other computer methods of trading has doomed the market to repeat patterns almost exactly over and over?

Or is it human nature to repeat our history?

GL

CJ

10.11.2011 -- Top of the old bear flag..

We are still in the landmine zone. Don't play around in here, you might blow your leg off. We are back up at the top of the old bear flag that we broke down out of.

It's possible we aren't done with wave 4 yet... which works better for a lot of reasons. If so, the target for wave 5 may be lower than previously thought, possibly in the 900's.

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Key Levels

Upside -- 1200, 1241, 1276

Downside -- 1180, 1174, 1152

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SPX Daily;

There's our old bear flag and there we are with a printed DOJI right at the top of it.

We'll see what happens now. Breaking through the top or bottom of this flag will determine which EW count is potentially the correct one.

Like I've been saying though, this area is a field of landmines.. don't play in it.

Still looking to buy the low 1000's.. potentially 900's now.. or scale in short above 1240.

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Meanwhile in Europe..

Seriously.. how many of these ridiculous votes and meetings do we have to endure before they just let the chips fall where they may?

You just can't bail out these problems.. nor will austerity fix anything.

If you dont have enough tax revenue to pay for your shit, then austerity is just going to lower your GDP as government workers lose jobs and take pay cuts, resulting in less tax revenue to pay for your lower expenses.

The only question is how long this drags out until ultimately the banks are forced to mark down all the soverign debt they are holding and the fireworks go off. The other question is how much worse they make it in the process of dragging it out.

Sounds a lot like what we are doing here in the US eh?

How many more years of 1.2 trillion dollar deficits can we run? What happens when we rip 800 billion or more of government spending out of the economy?

The world is a giant debt bomb. I fear what things may be like for my 2 year old son in his adulthood.

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Looks like Alcoa had a bad quarter and the Slovaks are making more bailouts difficult. We'll see what tomorrow brings in the landmine field.

GL

CJ

10.06.2011 -- Directional mystery

We are still below 3 very important areas of resistance, but we have broke enough resistance that we must now lean towards a new trend of going higher.

We are up nearly 100 S&P points in 3 days. Obviously there's going to be a pullback here soon. It will be key how powerful that is and if any support levels break down.

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Key Levels

Upside -- Right where we are (again), 1180 (50dma), 1210, 1245 (100dma)

Downside -- 1144, 1133, 1121, 1098

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SPX Daily;

We are back to a state of rolling the dice.

We have a bearish set up inside of a bullish set up. Neither is broke.

We have multiple EW counts possible.

We have some high growth stocks rallying and others red or flatish. See AMZN, CMG vs. LULU and PCLN.

Financials are in a serious short squeeze.

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I wouldn't touch this market with a 10 foot pole until something breaks..

Inbetween the 50dma and 1098 is a roulette table.


GL

CJ

10.05.2011 -- Right at the edge

Edit: 9:58 p.m. -- RIP Steve Jobs

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The market managed to climb back up into our bollinger bands and now we have a clear falling bull wedge to end wave 5.

I, however, am not sure wave 5 is done with us yet. I think a big reversal may be in store tomorrow as you will see in the chart below.

If we do happen to rally again tomorrow and close up and out of our falling bull wedge, then wave 5 of 1 of Supercycle C is over and we're starting a pretty big rally for Wave 2 of super C. I just don't think we are quite there yet.

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Key Levels

Upside -- right where we are again, 1162, 1183

Downside -- 1120, 1098, 1077

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SPX Daily;

There's our wedge and a prevous trendline from the old sideways channel. We are basically sitting right on both of those. That's what leads me to believe that we will reverse tomorrow and with the closest support at 1120, it might be a hard reversal.

I still believe we are going to finish wave 5 somewhere in the bottom half of the 1000's on the S&P.

If we were to close up and above this falling wedge tomorrow, then the big wave 2 rally has begun. Target is probalby the 1250 price point we were looking for before.

I still either want to short 1250 or buy 1040.

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Not much else of note today except the finnies were weak and certain momo growth stocks were weak despite the rally. This looks more like short squeezing going on than any real broad based buying. The losses/big gains are very erratic and have no consistency. Before we would see AMZN, LULU, CMG, AAPL, etc.. all surge on broad based buying. Now you get very mixed results on big up days. Just looks like selective stocks short squeezing and the rest just sort of muddle around.

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Just a quick map of my thoughts right now...

Bottom of wave 5 in about 2-3 weeks at 1020 or so.

Wave 2 lasts through xmas and takes us to 1250 or so.

Wave 3 down of Supercycle C down starts sometime in January. That particular round of selling will take us from the 1200's to the low 600s. Yes... a 50% market slashing at the beginning of next year.

My ultimate target for the bottom of Wave 5 of Supercycle C is S&P 415 sometime late next summer.

GL

CJ

10.04.2011 -- Thats why shorting 5th waves is dangerous

Interesting day.

After looking at it and how the trading went, I think this is/was a bull trap and designed to squeeze out shorts.

If I had to guess, I think we'll overthrow important levels tomorrow (in the chart below) and then re-collapse, leaving trapped bulls and squeezed shorts with no good re-entry in its wake.

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Key Levels

Upside -- Right where we are, 1143, 1166

Downside -- Right where we are, 1102, 1077

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SPX Daily;

As you can see we closed right on the bottom of the bollingers and right at our old support level.

We did not break anything that says the selling is done today.

I expect we may pop higher tomorrow and trap some folks and squeeze some folks and then return to our previous path.

However,.. it is possible that was it for wave 5 and we have begun a big rally for Wave 2 up of Supercycle C down.

Where we close tomorrow will be pretty key in determining which one it is.

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Other notes..

1) some momo stocks didnt have much of a recover today, but some did

2) financials generally only gained back less than half of what they lost yesterday


GL

CJ

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.

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Key Levels

Upside -- 1121, 1124, 1151, 1178

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

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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.

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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