Today was also a cloud walk day except in the negative direction may be I should call it mine trap. SPX opened 5 points and that was the high of the day. It made a low 1295.30 at 7.10 and then a rally to the 44.1% line at 1305 by 10.20. That was followed by a plunge to a new low at 1294.21 the low of the day by 10.41 and a drift to close at 1295.30 the first low of the day. This is very significant data and I plan to preserve it. The news was the new unemployment claims went up by 28,000 but that was a weak explanation. The other factors were. It was the day after the anniversary; The trade balance widened ; Trade with china slowed; Moody's down graded Spain and Libyan rebels were losing; Not enough; The federal deficit was the largest ever recorded. CBO upped our yearly deficits from 1.1 trillion to 1.5 trillion and said the tax breaks and 2% break on social security would add 400 billion to the red ink. Put differently we are dead broke; People are still losing jobs; We are buying more from others than we are selling. Here is the kicker our interest payments are soaring. When I put all these things in front of me I can see why the markets plunged today.
Technically speaking here is my hourly chart of SPX.
This has broken down thru the main channel it has been going up in. The points I am watching are 1280 which would equal in magnitude the decline from 1227 to 1173 in Nov. 2010. and 93 hours which was the time for the decline from 1129 to 1039 in August. This tells me after early morning rally for 15 minutes to dump the crap the floor collected today and quick decline to 1280 and a rally into close is not out of the picture. We are solidly in the declining phase and I do not want to be a hero and buy anything until I get a solid good signal.
This is my hourly TNA. The fast channel is broken. Support is from the upper median line in the slow channel. I still think it is noteworthy the top is at the intersection of slow and fast channel. The down trend channel hasn't formed yet. Right now the next solid support is at 66.0 If this is THE decline that drop to 66 may not take too much time and could happen by Monday.
This is my monthly dow chart. I started making parallel channels and morphed into a parallelogram. It had nine months of rally a 5 months of flat and another 9 months of rally. The rally for the past 24 months is in the shorter diagonal usually meant for counter rallies. The arrows marks the resistance on the longer diagonal. I have an ultimate speculation low of 4500 in 17 months. That is just an end to the pretty picture.
Just noting anything can happen and this is just a start a start my plan is to be very aggressively bearish.
Thanks for reading my blog.