Happy New Year all of you and Happy 100th post to myself! I never thought I'd continue writing posts on this blog, as it was really only setup for me to talk to myself (yes, I know that means I'm crazy)... but I've had a few days off and feel refreshed again!

It's a lot more work then I thought it would be, and I sometimes get discouraged when the market simply goes sideways for days weeks months on end, and then every time I'm forecasting a move based on the charts... nothing happen!

I feel like a idiot staying that the market is overbought, with all indicators pointing down... and then the market rallies!  Yes, your clothes are on fire... but don't worry, you won't feel a thing!  Duh!

Anyway... I'm looking forward to an exciting new year now!

Moving On...

Ok, I'm posting a chart from "the chart pattern trader" below (hope he doesn't minded). This is what I'm expecting to happen over the next 2 weeks.

I'm not looking for more then a 10% correction, before the rally continues to the 61.8% Fib level or the 200ma level... which will probably hit the same level by the time we get there.  Somewhere between the 1226 and 1300 spx level, as the fib is different for the monthly, weekly, and daily charts... but that's the general area I'm expecting to hit by mid-year.

The 200ma will provide huge resistance, and if that also connects to the fib levels for each time period... which I expect it to do, then I believe that will finally end the Primary Wave 2 Rally.  I'm actually sad that the wave to follow will be so devastating, and will wipe-out all those "retail" investors' savings and 401k plans.

But, I didn't create this bubble... that was Goldman Sachs!  Maybe the people who will have their life savings stolen from them, will rise up and a demand for the crooks to be arrested?  What else will 15-20 million un-employed middle classed Americans have to do... but march on the White House steps!

In a fair world, the market would rise and fall smoothly without manipulation and false bubbles inflating to unrealistic levels, followed by huge crashes.  But, we don't live in a fair world.  Greed from corrupt banksters, and others that stay hidden, create these boom and bust cycles.  All we can do is to try and follow what they are doing and profit along side them.

The alternative is to be the victim.  Profit with the crooks or be robbed by them... tough choice huh?  Yes, if you have any moral values.  But, you must focus on the good things you can do with the profits from following the crooks on wall street.  That's what I'm trying to do now.

Accepting that the market is a heavily manipulated game, and adjusting my trading to include those factors has been hard to do.  After all, the crooks didn't pick up the phone and call me to say... "Hey Red, we are going take the market up to ? by mid-2010, and then crash it down".

No, they forgot to call me.  So, I followed the same charts that everyone else did... and got burnt going short, as they printed another $10 Billion Dollars to use in the market to stop a natural correction.  Was that cheating... of course it was!

And of course that confused all the technical traders, defied the elliottwave predictions, ignored the short term fib levels, turned the astro turn dates upside down, and got the bulls high on helium gas!  Did I leave anything out?

Anyway, I'm hopeful that a huge crash down doesn't happen now... but I'm more confident that it will.  The higher we go, the further the crash down will go to.  If the forecasts are right, and I believe they are, then 3,000-4,000 Dow is where the market is ultimately headed.  That means that the high coming this year will be a high that we won't see for many years to come... remember it well.

Red

We are now at a dangerous point, as we managed to close at 1126 spx last week... which is at the 50% fib level from the 2007 high to the March, 2009 low.  But for now, I suspect that the light volume during this holiday season will continue to allow the market to move up higher or just sideways.  Therefore, I don't see much change next week, as we are still in a "holiday season" until next year.

Now, that doesn't mean that we can't pull back a little next week, (Monday would be the most likely day) and then rally into the new year (just no trend worth playing yet).  Maybe a one day correction to fill the gap around 1103 (at the most)?  I can't take anything serious until the volume comes back into the market.  The spx can be controlled easily through the dollar, financials or commodities.  Forecasting it now is useless, as any technical weakness will be bought by up.

Of course any major political event could cause a big drop for a few days, but who knows when something bad like that can happen?  Only those that are in power can know that.  Let's hope that they don't do anything stupid, as I certainly don't want a major war to break out somewhere again.

Moving on...

The dollar looks like it is back testing the moving averages and support lines, before another move higher will occur.  That lends support to a bullish scenario for the market next week.  Couple that will extremely light volume, and that should stop and serious sell off.

Personally, I'm staying out of the market until next year.  I do see a big move coming, but I'm not jumping the gun just yet.  Everyday brings new challenges, and opportunities... at least for some players.  I'm waiting until I see something that has better odds of success.

Red

I'm going to go "off subject" here for a little awhile, as I'm been lucky enough to have received an email about a week ago that told me about a website called "Project Camelot".  I know this is going to blow your mind, as this subject is something that most people simply "Don't" want to talk about.

What is it?  It's everything about the human race as we know it... meaning the "Truth" about UFO's, Alien's, Religion, Suppressed Technology, Underground Cities on Mars, Bases on the Moon, Stargate's, Planet "X" (Nibiru), and yes... even the Year 2012!  Don't even waste your time watching the video's on the site unless you are "Open Minded".  I've watched video's from only 3 of the people listed on the site so far (there are 60-70), and plan to watch them all.  (Each video is an hour or more).

I know that I started this blog with the intent to write about the stock market, and I still will continue to do so.  However, being that I constantly like to broaden my education in every subject, I couldn't stop at only the stock market.  After all... that's just the way that all of us are trying to use to achieve the ultimate goal of "Financial Freedom".

It's not "Money" that I really want... it's "Freedom".  I want to be able to go where I want, do what I want, eat where I want, sleep where I want, see what I want, etc...  We should be living in a time period of total freedom, yet we are still all slaves to our master's.  They are the "secret group" of people who rule the planet.  They force us to work jobs in order to eat and survive.

The corruption that is going on in the banking sector is the way that they control us.  But, it's such a small piece of the puzzle of "the meaning of life" that it almost seems "non-important" to me now.  The stock market is only one of the thing that the "secret group" control.  The other things can only be explained by watching the video's on the Project Camelot website.

Now that you all think I'm crazy, and have lost my mind, I'll move on to the stock market.  The next couple weeks are going to be range bound as there aren't enough bears left to squeeze... therefore the market won't rally much higher, and the bulls aren't going to sell because of the taxes they would have to pay on the gains they made this year... hence we have a "stalemate".

They will wait until next year to sell, and any taxes will be delayed until the next taxable year.  The "Bulls" I'm mainly referring too are the big institutions.  The average Joe isn't in this market, and the few that still are... certainly aren't going to sell during the holiday's.  Those are long term people, and won't sell until the market crashes down.

They will do what they always do... sell at the bottom, and buy at the top.  That's way they are called the "dumb money".  The "smart money" is going to wait until next year to sell, and lock in gains.  So, as for next week, I'm expecting the light volume to continue... which will keep any sell off from happening.  Yes, we could go down a little, and then rally back in the last week of December.

If you are a trend trader, playing options, then I'd stay out the next few weeks.  Now, if you can day trade, then that's a different story.  I just don't see a solid direction next week.  Lot's of overhead resistance, and a lack of bears to squeeze, should prevent and rally past the current highs.  And, light volume will prevent any real sell off.  We are still stuck in the Twilight Zone, and will probably stay there until this year is over.

However, next year is going to bring the start of a sell off that I believe will take us down to 3000-4000 Dow by 2012.  There... I said!  I made a bold predict, and put myself out there.  Call me really crazy now, (but I'm not).

I know this is not my usual weekend update, and I apologize for that... but I never stated that this blog is "only" for stock market related news.  In fact, I've said several times that it's just a place for me to post my thoughts... nothing more, nothing less.

Enjoy your life folks, and enjoy the holidays...

Red

Are we in the Twight Zone?

This has been any extremely frustrating week for all bears... especially myself.  Although I'll be a bull when the market points in that direction, I like being a bear better.  But don't get me wrong... I'll go long if there's a good chance to make some money on it.

Problem is... this market should be heading down, but it's not?  How can you go long when the technicals point down on so many different charts.  Very few charts point up, and if they do... they are overridden by the larger time frame.  If a 60 minute chart is bullish, but the daily is bearish, then you shouldn't take a long position (unless you are a day trader only), as the daily chart over rules the 60 minute chart.

Going into next week, the market could actually continue this insane sideways up and down movement... all the way to option expiration.  We are within just a few cents of hitting the 200ma on the USO (oil), which has very high odds of a bounce for at least 2-3 days.  That will give the S&P an "up" move as the big oil companies, (that are in the s&p) will rally from the bounce up.  This could stop any big down move in the market.

Then there is Gold.  It is also getting ready to hit the 200ma too, which should cause a nice bounce up.  That will again support the s&p, and prevent any big down move.  It means that the market will be in this Twilight Zone as it bounces up and down, until gold and oil has their bounce done, and are ready to rollover to the down side again.

As for gold, I'm very bullish on it long term and think that it will explode next year.  Oil is a different story, as demand has too come back for it to go higher again.  I'm neutral on oil long term, but short term I'm looking for a bounce.  Now for the wildcard... the dollar!

The dollar had another strong day Friday as it finally broke out of it's bullish consolidation trading pattern.  The UUP (dollar) closed at 22.68, up 18 cents for the day.  Another big move on Monday could cause a sell off in the market.  The UUP will hit heavy resistance at 23.00, (which, by the way, a move from 22.68 to 23.00 is considered a big move in it).  If the UUP hit's 23.00, the market should sell off hard, but it could be muted by oil and gold.

I'll be looking for some movement down next week, but I'm sure it will just bounce around some more... and not breakout of the zone yet.  I'll be selling my shorts, at a loss of course, whenever I get a decent move down.  If my positions weren't options, I might be able to get out without much of a loss.  But, options get killed with time decay, and that's just exactly what the market makers want... to take you're money.

I have too say that I'm really getting tired of all the manipulation done by the government to keep the market up, and not let it correct naturally.  It will come back to haunt them later on.  In the meantime, I might have better success trading oil or gold, as I expect a huge bull market to occur in gold over the coming years.  Oil... I'm not sure about long term, but both are ready for a bounce up next week.

Anyway, at this point, I don't see my prior forecast of a move down to 1070 area coming true.  The S&P has so many different backup markets supporting it that any one of them can keep it up... (as long as we continue to have light volume of course).  I don't see any heavy volume coming into the market until next year, after the holiday's.  That means that commodities (oil), financials, gold, or the dollar can come into the rescue and keep the market up at any time.

Look forward... the only way I see the market falling hard at this point is for the dollar to get a huge rally up going, the financials to collapse, oil to fall hard on weak demand and large inventories, and gold to fall as investors flee to the dollar for safety.  I do see all that happening next year, but as is for next week... it's unlikely.

Overall, I'm very disappointed, as it seems like all technical analysis's on the S&P is worthless... as they simply will not let is correct naturally.  I spend a lot of time studying the market and where it should go, and I believe that it would have went there if I had made my forecast last year, or anytime before March of this year.  I say that because of the massive printing of money that has been thrown into the market has changed all the rules.

You can't play poker fairly with someone who just prints more money to bet you whenever they run out.  How can you ever beat them, even with a royal straight flush (spade high of course), by betting everything you have (as you can't lose on a royal straight flush)... only to have them go print some more money and raise the bet beyond what you have?  That's what it feels like too me when I pick the right direction, but the time decay, and quick rally back moves, prevent me from getting out with a profit  in time.  You are forced to be a day trader only, which I'm not, as I don't have access to a computer all day... nor could I watch it all day, even if I did!

I'm sure many of you are also frustrated too.  I know that there has always been some degree of manipulation in the market... but never to the degree that's it's at currently.  They couldn't control the markets this much in the past, as they weren't printing trillions of dollars out of thin air... too be used to buy up the market, instead of stimulate the economy... of course.

Well, that about wraps it up, as I can't think of anything else too bitch about (I can really... but it's not worth wasting your time on, or mine!).  If you plan on playing the market next week, you might look to buy gold once it hits it's 200ma around 108 on the GLD.  It should rally back up to the 50ma around 113 currently.

Sorry my orginal forecast was wrong (or will be, as I now don't see it being accurate next week).  The only way it could come true is for a huge rally in the dollar, which could (maybe) produce a big (20-30 points) down day in the market.  Could we have a "Black Monday"?  It's possible, but not likely.  I just want to throw that out there, as technicals could easily support a "Black Monday", but oil and gold could stop it.

If... by some long shot, it does happen, I'd definitely be expecting it to rally back up before Friday.  The "Current Pain" is now at 110 spy, so I don't expect any sell off to continue down.  If you see it... get out of all shorts asap, as a rally back up will most likely follow it.

Red