Market view

Markets did a nice slowly and steady sell off - and I made a big mistake going long late last week which I took a hit on right now. I should just have stuck to my own thesis I had last many weeks that the markets would take out August lows and potentially hit the bear flag pattern at 1000-1050 on SPX - however it looks liked the euro would rally and markets would rally.

Well here we are - we broke below important support at 1119 SPX where I sold some of my long positions which was a must for me - so mostly just pure cash now and waiting this out. Got a few TNA on support yesterday but as the support zones did not hold - I sold most of them again with a loss.

So again - we took actually out the SPX August lows at 1100 which I also had in mind we would do some weeks ago.

Something which is VERY interesting is that the transports hit my perfect target to the downside yesterday - this indicates that the transports may have made the bottom for this year 2011.

As I wrote before - I think the BOTTOM of 2011 is getting close - I have a target date on 7th of October which is on Friday - so there is still possibility we can go lower into Friday.....

The bear flag pattern suggest a move to SPX 1020 so I would not be surprised to see another steep sell off - now we have broken below 1100..

Conclusion:

All I can say to you right now is - I needed to stick to my own thesis I had last 3 weeks with the move to 1000-1050 and new lows , I did not and lost a good amount of money on it sadly - but over the past many months I have been in so many big winners so its only down a little from all the profits made this year. Overall I'm mostly cash - still holding some long positions CYCC, THLD , YGE, (got stopped out STP) , and TSL - so I'm holding some long positions as I think many are extreme cheap.

I think a bottom is VERY near - transports hit my downside target - the bear flag pattern suggest 1020 on SPX and my bottom fib date for 2011 is on Friday 7th of October. All I can say is - a major bottom is close at hand. We have now bullish divergences on Russell and Transports daily charts - and what we need now is a buy signal and "reversal" bar to the upside.

The question is - will we now fall more before the rally to begin? I think we could see 1000-1050 on SPX with some panic before...the real bottom , so be prepared again but have loads of good cash levels so you can buy in huge as soon we get a buy signal on daily chart.

Hope my charts helps you out a bit

Best of all