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