Short term view

New year, new plans. On 12/28 I wrote:

With a serious oversold condition and thin volume, this market has not much room to go down. My best guess is we are heading toward another bumpy trading range. We may see some higher highs, then collapse in new year.

We did took out the 12/27 high around 1270. We are challenging the 6 month high which is SPX 1285-1290 area from Oct. 27 and 28. The market is overbought and is losing upside momentum in to today. Today's tape is interesting, dip lower then rally back. As a typical conspiracy believer, I think it is "smart money" trying to front run the job data tomorrow. Since smart money is always smart and never go wrong, I guess the job data must be good. I guess the market will break out and challenge 1300-1320 area. I will refine my target based on tape reading later.


Add charts.


One thing to note, Gold is recovering and actually gained more today than equity. Gartman also turned bullish on it. Refer to some "Gartman followers" here. This is another warning sign. Why big guys buying gold?

I take if the job data bad, we will have a double top at 1290 and trigger a wave 3 sell off immediately. I also think we will have QE3 this year, after a brutal blood bath.