Stocks. Bears took control from the bulls today, but unless you were up at 2 AM EST for the break of the bull channel or 5 AM for the retest you missed the sweet entry and trade of the week. I've adjusted the primary wave 2 yellow channel to more of a flat. Short term the bears remain in control as long as the top line of the new bear channel holds. Longer term, we need to break the bottom line of the yellow channel which is slowly rising from 800 for confirmation the bears are serious about this next campaign south. I'm also including an SPX chart which has both the triangle many technicians are now pointing to as well as a possible channel for a wave 5 move.I agree with Mark that we’re most likely in wave 5 down on TLT. There’s an open gap in the chart around the 100 mark and I’m pushing my luck hoping for a gap fill, but will withdraw my troops on any strength here. I note that /ZB landed pretty much right on the 50% retrace of the parabolic move up, and TLT landed right on the 61.8% tonight. A 78.6% retrace takes us to the bottom of that gap. Will that happen here in wave 5? Don’t know, but with a parabolic collapse, it’s likely. Remember, parabolic collapses do not stop at 50% marks (these fibs are just of the last parabola, not the entire bull run). They go on and on. I sincerely hope this one does not.
Bonds. Bonds got destroyed today and continued their march towards calling the Big Ben bluff. Short term the count looks fairly obvious with 3 of 5 for the current impulse ending today or about to end. Longer term the blue channel is in control and I expect the bond bears to continue to take territory until Bernanke is forced to bring Big Ben to the battle field and not just threaten the bears. We also had a classic overthrow out of the channel followed by a quick and violent reversal back into the channel where it has once again begun rattling it's way on down.