02.29.2012 -- Reversal?

Today was a miniture version of what i've been waiting for. We broke the upper trendline of the wedge intra-day and then proceeded to sell off and close red.

I would have liked to see a bigger blow off and a larger reversal, but today could qualify.

So far, I would say this appears to be another pullback (which we havent seen in awhile) and then yet another ramp sometime before a sell in May event. We will see how the trading goes if a sell off occurs here. A major top will involve major selling.

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Key Levels

Upside -- Here to about 1375

Downside -- 1361, 1354, 1310, 1300, 1269, 1258

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SPX Daily;

Here are all the potential support areas. It's interesting how the trendlines end up so closely following the moving averages right now.

Even though the market didn't end down a ton, there was some heavy selling in areas of the market. The Russel 2000 again got hammered. The Russel is one of the areas that was still a big move away from new highs.

AAPL was up 1.3% but the NASDAQ was down 20. That tells you most things were hammered pretty good and AAPL kept it from looking real ugly. Probably done on purpose.

Early next week is a phi mate turn date. So this could be just another fake out, but those dates are +/- a few days, so today may have been it for at least a couple weeks.

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Bernanke was probably not happy about the reaction to his speech today. By downplaying QE3, his intention i'm sure was to hammer oil prices back down. Knowing that in doing so, he might ding the market and knock treasury prices down.

Well.. he spoke.. market didn't like it, treasury prices sure enough headed lower, but oil held steady at 107. Oooohh.. i bet that burns his ass.. hahahha.. he is pissed tonight I think.

He did though manage to beat down the precious metals. But in the end, precious metals probably don't matter a whole heck of a lot to him, but oil does.

It really is sad.. I can't stand Ben Bernanke and everything he stands for, but at the same time, I know that the downfall of what he's created will mean terrible things for this country and my own children. In the end though, what he's doing has no other outcome, it is unavoidable, the outcome can only be delayed. I'd much prefer to get it over with now.

GL

CJ

02.28.2012 -- on the edge..

Don't have a ton of time today, so will just get right to it. The S&P is right on the edge of new highs. The NASDAQ is already there.

BUT.. odd divergences. The DOW Transports were down today and are over 10% from new highs. While at the same time the DOW has hit new 52 week highs. Thats a big Dow Theory non-confirmation. Probably never seen the Trannies lag by 10% like that.

The Russel 2000 is also nearly 5% off of new 52 week/all time highs. The Russel today was down and was trading like an anchor to the market all day.

The NASDAQ had a nearly even Advance/Decline print today, despite the NAS being up 20 points. I believe this is all Apple all the time.

Leadership is very narrow.

They are attempting to rally the financials and light the spark to send us to new highs on the S&P,... BUT.. even if we do, we still have the Russel 2000 and probably more importantly the DOW transports a very good clip off new 52 week highs, which will remain a big divergence and DOW theory non-confirmation.

The market at or approaching 52 week highs and some indicies like the Russel 2000 near all time highs.. I cannot believe that the 10 year yield still sits at 1.92%. The amount of liquidity to pull off new market highs and all time record low yields is staggering.

God help us all if inflation sets in. There's no one in the FED that has a rats ass chance in hell of stopping it.

Anyways.. no time left..

SPX Daily;

02.23.2012 -- More of the same..

Nothing much changed today. We bounced off the mid-bollinger bands yet again and are continuing to ride up the top of the wedge.

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Key Levels

Upside -- 1360-1370

Downside -- 1354, 1347, 1310, 1298, 1257

support continues to rise while the market is stalling and gyrating. We are now at the point that a 105 point sell off in the S&P would put the market below all support.

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SPX Daily;

Not much to add today from our recent view. We continue to ride up the top of the wedge. We bounced off the mid-bollinger bands yet again which of course resulted in another trip to the top of the wedge.

We have a shot here to get a false break higher out of this wedge and then I would wager a collapse would be right behind it.

One change that I did not mark is that I think the EW count has changed for this particular rally that began just before christmas. It appears it is a wave structure in which we have a very large first wave, a much smaller 3rd wave and we are now in wave 5. I believe wave 5 is a micro copy of the entire structure. If so, there are 2 very small waves left.. a very small sell off and then one more very small lift. Under that count, that would complete the rally.

If my current count is right, I would guess sometime around next Wednesday could be a target for the end of this, but as usual EW counts can morph and can vary quite a bit from person to person attempting a count. Its not a primary indicator for me, but it does at the moment match all other technicals that this rally is nearing a major end.

GL

CJ

02.22.2012 -- Tired..

Is the rally tired? yeah.. its real tired. Its like a bullet shot straight up in the air that's just about stalled.

You know whats more tired than the market? Me. I'm so sick and tired of the lies and bullshit that comes from the so called leaders of this country.

Here we are in election year and what are the headlines coming from our "leader" and potential "leaders"? Corporate tax reductions and closing some loopholes and lower the top bracket tax rate to 28%.

We are running trillion dollar deficits and these assholes are flapping their mouths about lowering taxes.

It's become nothing but a contest about who can promise the most bullshit not about who can fix problems and actually be a leader.

Apparently this country is so full of morons that they will elect a snake oil salesman over and over and over again.

To be honest, I don't like any of the choices. I think they all suck. I think the founding fathers are rolling over in their graves.

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Key Levels

Upside -- 1360-1370

Downside -- 1352, 1342, 1300-1296, 1257

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SPX Daily;

Same wedge we've been following. The bollingers though are starting to flatten out here, which is always a pre-cursor to turning down. Doesnt have to be a trend change, but the bollingers will always flatten before a trend change.

The interesting part about it this time is that the bollingers are flattening while we are still riding above the top of them. That's a set up for a big sudden fall that goes right through them with first support being just above 1300.

The market is obviously tired here. The only question again is what kind of selloff we get when it comes.

If we get a mild selloff that eats up time but not much % off the S&P, then there's likely another ramp coming.

If we get a very impulsive and powerful selloff, then questions will be asked about whether we've already seen the highs for the year.

GL

CJ

02.21.2012 -- 4 dollar gas and counting..

Oil broke recent highs.. nothing really stopping it now from surging back to 150 again. Except this time, 150 WTI will mean 6-7$ a gallon at the pump.

It's world economies heating up.. yeah thats it.. thats the ticket.

It definitely doesn't have anything to do with trillion dollar deficits, ZIRP and massively increasing FED balance sheets. Nope.. not that.

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Key Levels

Upside -- here to 1370

Downside -- 1351, 1345, 1300, 1294, 1257-1250

A close below 1345 will be short term bearish and will mean a test of 1300 for sure.

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SPX Daily;

Here is our continuing rising bearish wedge.

This thing will break one day. The question is whether we get significant new highs in all indicies before doing so.

Right now, we have a significant new high in the NASDAQ and DOW. However, per DOW theory it is a non-confirmation with the Transports as they have not made a new significant high and actually deteriorated today. Also on the divergence side, the S&P, Russel 2000 and Wilshire have yet to make significant new highs.

It is possible still that we still have one more trip to the bottom of this wedge and yet one more surge to attempt to reach the pinnacle of it. That would work time wise, as we will be entering that late March/April timeframe where sell in May becomes a factor. But the next move down could be it too.. its all going to be how the market trades the next down move.

GL

CJ

02.16.2012 -- Still rolling over?

We had a new high in the S&P by less than a point and a new high in the NASDAQ today, but I still believe this is all part of a topping process and probably a larger topping process.

Tonights chart will show you exactly what happened today.

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Key Levels

Upside -- here, 2370

Downside -- 1345, 1300, 1290, 1257, 1250

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SPX Daily;

heres our latest chart again. notice how we hit the bottom of the bollingers, which was last support until a fall to 1300, and then bounced right back up to the edge of the rising wedge. That is where the market sat pretty much the rest of the day.

so we have a new high in the SPX and in the NAS, but in the end, we still have a DOW theory non-confirmation with the trannies not making new highs yet and we are still within our rising wedge and have not broken out of it.

i suspect we'll ride the top of the wedge or maybe have a false breakout of it here for OPEX.

we may not though.. in the past it has not been unusual for the market to choose a day like OPEX to fall apart at major tops. I just don't think we are quite there yet. We need more selling to creep in and volitility to rise and then AFTER that happens.. probably another run to make people think we are going to rally again after consolidating and that is the point where it can all fall apart.

as long as the S&P, IWM and Trannies arent making new highs.. we have divergences in the market including a DOW theory non-confirmation that are screaming things are not well.

GL

CJ

02.15.2012 -- What kind of top is this?

We are putting in a little top here. The question is how large this top becomes.

Is this just a little top of the rally since 12/02? in which case the bottom of the rising wedge will likely be the low target or will this become a larger and larger top as more and more support breaks?

Don't guess, just let it tell you. First stop is the bottom of the wedge in todays chart. That rests slightly above 1300 at the moment but rises daily. Then all 3 major moving averages are sitting within 50 points of the bottom of the wedge.

The market is set up in a way right now that a fast 100 point sell off would slam the market below all support. But, lets see support lost first.

This is now a good spot to be short with the recent highs as stop loss and watch the support levels.

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Key Levels

Upside -- 1353, 1370

Downside -- Here, 1337, 1300, 1288, 1257, 1249

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SPX Daily

Theres the wedge and our little rollover is sitting on very first support at the mid-bollingers and previous resistance at the shoulders of last years big H&S pattern.

If the move since last October is an ABC move, then we could be done. If its a 5 wave move, we are probably starting wave 4 down to the bottom of the wedge and then one more rally north to complete the count.

There's really no way to know which it is other than watching the support and how the market trades. If we are indeed done with this entire move, we will spend some time putting in a larger top and then the selling will hit super fast and furious.

The market has created a large amount of optimism and hype here, so if it is going to be a major top, it's going to take some time to build a larger top.

GL

CJ

02.09.2012 -- still bleeding higher..

In tonights chart, I threw in what I think is now a completed EW count.

There are other options, but this looks like a clear complete count. To be proven wrong, 1370 needs to get taken out.

I dont normally use EW as a major indicator, but I use it when it is supported by all other technical indicators.

In this case, it is supported by the daily Stochs, MACD, trendlines, timing, and sentiment.

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Key Levels

Upside -- here to 1370

Downside -- 1348, 1332, 1317, 1290, 1279, 1257, 1242

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SPX Daily;

Here's the labeled count and where we stand. We are essentially just sliding up the upper trend line as it rises each day, so we are rising slightly continually to new recent highs but without breaking resistance.

This is pretty self explanatory, so i'll move on.

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I think most of you who read this blog know that we are heading in a direction that will ultimately lead to bad things. We just don't know how long it will take to get there.

We are essentially blowing a bubble in global central bank balance sheets.

How far that can push markets is anyones guess.

It certainly would qualify as by far the largest and most insane bubble to ever be created.

In the end, trying to predict it seems silly though.

Will anyone even ever know that you were the one to call the collapse as the world sinks into a global depression caused by a soverign debt and central bank balance sheet bubble?

A global central bank and sovreign debt bubble is not a tech bubble or a housing bubble. It will be a global bubble and a devastating bubble. If you had the choice between global nuclear war or global exploding soverign debt bubble, I just might choose nuclear war.

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Some numbers..

I think some folks lose sight quickly of how large these numbers have become. 7 or 8 years ago, throwing around numbers like 50 billion would have been enormous. The 400 billion deficit under Bush seemed tremendously huge.

These numbers have gotten so enormous they are leaving comprehension for most.

Lets talk for one minute about one number in particular. Lets assume for a minute that the IMF hands over 50 billion dollars to help bail out Greece yet again.

Now lets assume that the 50 billion is funded mostly through US tax payers.

Keep in mind too, 50 billion is less than 1/20th! of last years fiscal deficit.

50 Billion is equal to approx. 160$ for every man, woman and child in the United states of America.

If you have a family of 4, giving Greece 50 billion is like taking 640$ out of YOUR wallet and handing it to Greece. You may not feel it now, but you will in the future when this money must eventually be paid back.

Now compound that into our fiscal year deficit.

The US Treasury borrowed, in excess of tax revenue, the equivilant of over 3500$ for every man, woman and child in the US last year.

Or over 20x the 160$.

So a family of 4 is on the hook for 14000$ in accumulated national debt for last year.

We've done this for 3 years in a row now.

In 3 years, we are on the hook for 42K dollars per family of 4 in just 3 years.

This is just borrowed debt in excess of tax revenue.

Obviously Bernanke keeps mentioned how fiscal policy must be addressed, yet at the same time, he continues to allow them to spend uncontrollably by keeping borrowing rates at zero.

But think of it like a mortgage.. even if your mortgage rate was zero, you still owe money every month on the balance.

Then lets say you have a 300k mortgage at zero percent interest. You pay 1100$ a month, it comes straight off the principal. BUT.. at the same time that year, you take out a home equity loan for 10x the amount of principal you paid off that year. So you paid off almost 15k, but took out another loan for 150k. Now you owe 450k next year. Rinse repeat. This is what the government is doing. This is what governments around the world are doing.

This is unsustainable.

We will either see treasury rates blow up on us or government spending must be drastically reduced.

Either way, the economy will be harmed badly.

This is the essence of this bubble. The worst we have ever seen.

GL

CJ

02.08.2012 -- 21 points

We are 21 points from new multi-year highs on the S&P. If the bears longer term EW count is ultimately correct, the rollover must occur soon. It wouldn't destroy the bear thesis if we take out 1370, but we would have to back way up in the EW count and targets well into the upper 1400's would become possible.

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Key Levels

Upside -- Here, 1370

Downside -- 1344, 1329, 1314, 1275, 1257, 1241

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SPX Daily;

Again, not much change. We are doing what I said was necessary to drag this out. Which is close within a small range each day. +/- 3-4 points at most. How long can the market keep that up? I don't know, but I would guess not much longer.

The MACD is up to 19.73. Moved a little higher. 24 is that magic number we have never crossed on the daily. And the previous times we have gotten that high were all major reversals.

We just have to wait and see what happens. If 1370 gets taken out on a close and stays there for a couple days or more, there will be some big changes to a lot of EW counts floating around out there. It wouldn't kill the bear case long term, but could provide the open door to move prices another 100 points higher.

GL

CJ

02.07.2012 -- Tick tock..

Not much change from yesterday, except I might expect us to pop up about 6 points from here just to touch the trendline and then reverse, but we don't have to.

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Key Levels

Upside -- right here, 1350

Downside -- 1340, 1327, 1314, 1283, 1272, 1257, 1239

still very lopsided

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SPX Daily;

Not really any changes. We started to sell off, touched the top of the bollingers and then bounced right back up into that small soft range we can stay in until something breaks.

The MACD is up to 19.26.. 24 is the magic max of the last decade. So there is room, but we've only made it to 24 3 times in the last decade.

The Stochs are also back up to max overbought.

Volume has been extremely low lately, as was noted by Zerohedge, the volume yesterday was the lowest relative volume of the last decade not including holidays.

tick tock..

GL

CJ

02.06.2012 -- Dump or break out?

We are sitting at a lot of resistance here and there's really only 2 choices for the market. We either dump or get a big breakout (that I think will ultimately be a false one).. and that will happen very soon. Like tomorrow. There's just no time left.

I supposed we could go nowhere all week.. stay in a 3-4 point S&P range the entire week.. that's what would have to happen to last to the end of the week, but I just don't see that happening.

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Key Levels

Upside -- Right here, a few points higher around 1350

Downside -- 1327, 1320, 1310, 1288, 1268, 1257, 1238

support spread back out so that its very lopsided,.. a sign of a possible imminent reversal

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SPX Daily;

You can see how we are butting right up at resistance here. We've tested it twice now since Friday. There just isn't time left here.

Not much else to say here.. something is happening soon.

GL

CJ

02.02.2012 -- still waiting

Again nothing changed from yesterday. The Russel and Nasdaq finally broke their short term parabolic moves, which IMO had been supporting the market the last couple days. The NAS has been up big while the S&P and DOW are just kinda watching and getting pulled along behind.

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Key Levels

Upside -- Right here, 1340-1345

Downside -- 1310, 1287, 1257, 1234

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SPX Daily (12 month)

Closed under the trendline yet again. One of these days we are either going to bust higher and have a blow off top, or we are going to reject this key level (which I expect) and we'll see what kind of sell off we get from it.

Running back up to near the top has not done much to the Stochs or MACD. The stochs have a very small roll back up, but they are below that overbought level that could keep it running, they look ready to just roll back over again.

Something will happen soon, I think we will all at least welcome a resolution to this move.

GL

CJ

02.01.2012 -- Today did not change anything..

Today felt bullish and likely had some bears on the edge of their seat as to when or if a pullback at least may ever come.

But, when you look at it technically, no key levels were broke on close and nothing really changed from what I said yesterday.

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Key Levels

Upside -- 1325, 1340-1345

Downside -- 1310, 1282, 1257, 1232

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SPX Daily (12 month)

As you can see here, nothing really changed today. While having a small breakout intra-day, the market closed inside the bollinger bands and below resistance.

The Stochs and MACD did not budge, they are both still indicating a rollover is imminent.

Not much else to say here besides wait for it. I still believe a big down day is in the works here in the next few days.. maybe tomorrow, but more likley by Monday/Tuesday.

GL

CJ