The DOW is currently off 230 points, below the 8,200 level and the S&P is approaching the 820 mark from just above. These are key areas of support. If they fail, then we are likely to head much lower as this morning’s employment report would suggest is where the market belongs.
It has already descended below the area I was considering for the bullish triangle. From a technical perspective, though, I won’t call it eliminated until 815 falls, which is the low on December 1st. And the bullish scenarios for wave B aren’t taken off the table until 740 falls which are the late November lows.
My short term oscillators are either already oversold or approaching that condition, thus you must be careful in shorting here. When I saw a rally on the open I couldn’t help myself and opened a small position short which is already profitable. Heck, only a fool would buy stocks into the face of an employment report like that. But, you say, people are too negative and it’s already priced in? I say B.S.! This market is not priced correctly until the debts that add up to more than $300,000 for every man, women, and child are brought under control by DEFAULT. But that’s just me, of course I know how to do 2nd grade math.
But markets never move in a straight line to their final destination, I fully realize that. I do, however, also realize that waves within markets are not shaped like a bell. Growth starts out slowly and builds into a strong growth phase that gives way to the final PARABOLIC top. The back side of the wave DOES NOT take the same shape as the front. The back side, which is where we are now, is much more steep… take a look, it’s in every chart that’s ever gone parabolic. Thus, this decline, one that’s on a grand supercycle level, is far from over. But history also shows that there is, almost always, an “eye of the storm.”
So I am careful here and am not completely sure of where we are within the waves. If wave A down has not ended, then we are getting close. Was the past 2.5 months of sideways movement the eye or wave B? Could be, I don’t rule it out. Thus I am in a period of time where I am uncertain in the short term, but I am NOT uncertain in the longer run. The MATH is speaking loud and clear. Is everyone listening?
820 just momentarily fell, 815 is the last important level before we retest the prior lows. The very short term stochastic indicators show that some basing in this area is likely. The DOW just made a new short term low, but the SPX is just above. NOT bullish if 815 falls! However, if this area holds and produces a bounce in the face of that employment report, look out above, the fools will then be temporarily in control.