03.08.2012 -- Decision time..

So we did what I expected in my last post, we broke, we are now backtesting. Believe it or not, it took the last 2 days of rallying to backtest the old trendline.

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Key Levels

Upside -- here to 1374

Downside -- 1325, 1320, 1279, 1259

Again still at a point where 110 S&P points breaks all support.

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SPX Daily;

So pretty clearly you can see the break below the trendline and then now the perfect backtest.

We either break back into the wedge now and most likely put in another round of new highs, or we will fail right here.

If we fail right here, I suspect we will test the full bounderies of completely falling apart which would be the lowest moving average which currently sits at 1259 and rising. Below that, the market has a real problem on its hands.

its pretty much do or die for at least 50 points here, the break higher must happen tomorrow if its going to do it. Either that, or it would need to be a very narrow range day and explode up on Monday.

Otherwise, i expect us to re-fall hard here soon.

GL

CJ