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

09.29.2011 -- Just waiting to break lower...

Shorter update tonight. It appears that they are trying to stop a boulder from rolling down a hill here. Just..... neeed..... tooo..... hollldd... it...... til..... fri....daaaaayy.....

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Key Levels

Upside -- 1170, 1200

Downside -- 1142, 1134, 1121, 1115, 1102

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SPX Daily;

We opened up big today and tried to take out the mid-bollinger bands, which we did breifly, then failed and traveled all the way down to the bottom of the bands, which is what we bounced off of near the end of the day.

If we don't take another shot at breaking below the bollingers tomorrow, then it will probably happen on Monday.

Most of the support underneath us is now weak and been tested several times. 1115-1121 is probably the strongest area that has a chance to hold.

Not sure what to expect tomorrow, it is EOQ, but not sure that matters anymore.

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One other note from today.. all the momo stocks took a pretty good beating despite the day ending quite green on the DOW and S&P. AMZN, CMG, LULU, etc. all had it rough. Hedge fund redemptions the likely culprit.

After tomorrow, the market should reveal what the next big move is going to be.

GL

CJ