(to view on youtube: http://www.youtube.com/watch?v=7hZPBMnfL1Y)
Crash alert! The Non-Farm Payroll Report could crash the market. If it's viewed positive, then we should rally and everything will be ok until next week. If it's really bad, then look out below!
The market isn't bouncing like I thought it would, and the daily chart is turning down hard. This all increases the odds of a stock market crash happening by the end of this week or even into next week.
(to watch on youtube: http://www.youtube.com/watch?v=pVCW9Zpra5Y)
There is the erie feeling that the release of the death of Tim Osman (aka... Osama Bin Laden) who has been dead since 2002 and put on ice until such time that the release would benefit the gangsters was done at this time period for a reason. It smells of distraction too me! Do they plan to pull a fast one and do another "Flash Crash" while the media is focused on something else? Let's also not forget that the Legatus meeting is over now, and a turn in the market did indeed start this week. So how far will they take it down is the question?
Will it just be a small pull back and another run higher to the FP on SPY of 138.86, or is that something that won't be hit until later this year... meaning that a top is current in on the market right now. I'm starting to lean toward a much larger sell off over the next few days, as things just don't feel right. It seems everyone is looking for another push higher right now, as we did backtest the breakout level from the inverted head and shoulders pattern today. I also see that the measured move up from a successful breakout on that pattern should push the market up to the 1440 spx area.
But, what if the breakout was a "fakeout"?
Yes, it's looking a lot like we will continue down tomorrow and Friday too I believe. The angle that the daily chart is rolling over at is very steep, and it's not looking like it's going to stay above the zero line on the MACD and Histogram Bars. This spells major trouble for the bulls. I think a lot of bulls are going to get trapped long tomorrow when the short term charts get quickly overbought and roll over into another wave down.
Even the die hard bears might be sleeping and not see this move coming. I think that the bears are now looking to exit any shorts that they had and are expecting a big bounce from this support area that the market is current in right now. However, the problem is that the short term charts are moving up fast from oversold territory and will become overbought early tomorrow morning. Not good for bulls if they want to stage a rally at this level. I just don't see it going very far right now.
The bottom line... we could have another Flash Crash!
Once the 30 and 60 minute charts peak and get overbought tomorrow, they should roll over with a vengeance and have the daily pushing them down hard and fast too. This makes for a "Wave 3 or C" in Elliottwave theory. I just can't see a the market overcoming this chart conditions, as well as the fact that the dollar and vix are now breaking out to the upside as well... which trade inverse the market.
For now, I think the SPY FP is out of the question and the short term top is in. Maybe later this year the FP will be hit, but right now I think the trend is down. I don't know how far down they are going to take this, but it should clearly make the inverse head and shoulders pattern breakout a "Failure". This should happen tomorrow I believe, and most likely the rally will end early in the morning and we should rollover into the afternoon and close. We might not make it even the first hour? Hard too say for sure, but the 60 minute chart is moving up very fast. It will be overbought in the morning session tomorrow. The 30 minute chart is already above the zero level and could rollover at anytime.
So, the ABC move that I was looking for today should now happen Thursday morning. I think we already started the A leg and possibly the B leg into the close Wednesday. That leaves the C leg up tomorrow and then she rolls back down hard into either a wave 3 or C... nasty, either way! The charts don't lie, and right now they are very bearish. Yes, the charts can be (and are) manipulated by the wallstreet gangsters, but they don't seem to want the market to rally right now. Get ready for a surprise gang, as I think a lot of bears will miss this move.