Okay...lets take a look at two different scenarios. As a Permabear, it is always a battle to be open to both sides of the story, but I continue to challenge myself in that regard.
First, lets look at the bullish market scenario.
Sp'daily
VIX, daily
The simple bullish outlook is that we are very close to a floor - if not already. So long as the market does not break 1340 - a very major level, market should be fine to resume another major multi-month up cycle. First target would be 1435/40, with an ultimate upside target of 1550 (see monthly chart)
We have two major issues though to note. There is the constant threat of the Bernanke doing more QE - along with other ECB QE initiatives also. Second, there is the Facebook IPO. They sure won't be listing that wretchedly over hyped nonsense if the market is in freefall. I guess they could pull the IPO, but...its just something I think is worth keeping in mind. I think a lot of bears will be a lot more comfortable, once the ultimate hysteria social-media IPOs is listed.
Now, lets look at the 'doomster' outlook...
Sp', daily - bearish outlook
VIX, daily - bearish market outlook
First, we have the very real possibility of a large H/S formation developing in the SP. The floor would be around 1340, and then a bounce back up to 1380/90, before a severe wave lower to at least 1270/50. A 'doomer' wave'3 would arguably target the monthly wedge/channel low of 1150... sometime between May and October - as the following monthly chart again highlights...
Sp'monthly..simple chart
In terms of the VIX, and bearish count..we may have just completed a wave'1 higher..and now need to pull back for a few days, maybe even a week or two. What matters is we put in a higher VIX low, and then proceed to bust above the critical 24/25 level.
If we see VIX 26/27 at any point, we'll know some 'exciting' times are ahead. A challenge to last years peak of 49 would be the first target for the doomster bears. If 49 broken..then 60/65.
So, which story will it be?
As someone who is inclined to a more doomster outlook, I'd naturally say the latter. I could write a lot about how dire the fundamentals are, but plenty enough people are already doing that, just go see Zerohedge, Mish, or any of the other good sites. However, for now, I would just want to emphasise the following....
I've been thinking it over for the last few hours, and I have to come to this conclusion...
"What matters most of all, is how the monthly cycles close in April, if we see April monthly cycle close net-red, then it'll be flashing the first sell signal (even if its a moderate one) for over 7 months. Short positions, with 'serious money', can be taken with a stop at the April peak of Sp'1422."
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My overnight posting (probably dealing with the Euro indexes) will be due around 9pm EST.
First, lets look at the bullish market scenario.
Sp'daily
VIX, daily
The simple bullish outlook is that we are very close to a floor - if not already. So long as the market does not break 1340 - a very major level, market should be fine to resume another major multi-month up cycle. First target would be 1435/40, with an ultimate upside target of 1550 (see monthly chart)
We have two major issues though to note. There is the constant threat of the Bernanke doing more QE - along with other ECB QE initiatives also. Second, there is the Facebook IPO. They sure won't be listing that wretchedly over hyped nonsense if the market is in freefall. I guess they could pull the IPO, but...its just something I think is worth keeping in mind. I think a lot of bears will be a lot more comfortable, once the ultimate hysteria social-media IPOs is listed.
Now, lets look at the 'doomster' outlook...
Sp', daily - bearish outlook
VIX, daily - bearish market outlook
First, we have the very real possibility of a large H/S formation developing in the SP. The floor would be around 1340, and then a bounce back up to 1380/90, before a severe wave lower to at least 1270/50. A 'doomer' wave'3 would arguably target the monthly wedge/channel low of 1150... sometime between May and October - as the following monthly chart again highlights...
Sp'monthly..simple chart
In terms of the VIX, and bearish count..we may have just completed a wave'1 higher..and now need to pull back for a few days, maybe even a week or two. What matters is we put in a higher VIX low, and then proceed to bust above the critical 24/25 level.
If we see VIX 26/27 at any point, we'll know some 'exciting' times are ahead. A challenge to last years peak of 49 would be the first target for the doomster bears. If 49 broken..then 60/65.
So, which story will it be?
As someone who is inclined to a more doomster outlook, I'd naturally say the latter. I could write a lot about how dire the fundamentals are, but plenty enough people are already doing that, just go see Zerohedge, Mish, or any of the other good sites. However, for now, I would just want to emphasise the following....
I've been thinking it over for the last few hours, and I have to come to this conclusion...
"What matters most of all, is how the monthly cycles close in April, if we see April monthly cycle close net-red, then it'll be flashing the first sell signal (even if its a moderate one) for over 7 months. Short positions, with 'serious money', can be taken with a stop at the April peak of Sp'1422."
-
My overnight posting (probably dealing with the Euro indexes) will be due around 9pm EST.
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