11.08.2011 -- Closed at a turning point..

The market closed right at some resistance, which is pretty much the norm. If we close more than a few points higher tomorrow, we'll likely go straight to 1310ish.

If we start to sell off, it won't take much to challenge the bottom of the rising wedge again.

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Key Levels

Upside -- 1276, 1285, 1308

Downside -- 1257, 1228, 1198

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SPX Daily;

There's our wedge and the potential to expand it. The expansion would be along the intra-day highs as opposed to the closing highs.

It's hard for me to believe those 2 big down days was all there was for wave B of 2. At this point, it is certainly possible and will basically be confirmed if we go any higher than 1282.

The timing of all this has me a bit stumped.

Unless somehow, this Wave 2 manages to stretch out for almost another 2 months before topping, its unavoidable that we begin a dramatic decent right into the holidays.

The only way it could stretch out 2 months is if we are in some kind of triangle pattern for B here that does a ping pong ball bounce between 1217 and 1283 until December and then we hit C of 2 and manage to make that last into January. The only way thats going to happen is if the market really falls into a lullaby here and volitility really drops.

We at least answered 1 question... that we arent in Wave 3 down yet. Its still remotely possible, but we'd need to tank like 100 S&P points in the next week. So, we just have to figure out how to map the rest of this correction.

I don't see how they drag this out til January.. but i've never seen the holidays fail.

GL

CJ