1540.25 - 1540.50 is the key level (OAV) for today

I'm heading out to renew my drivers license therefore I could miss the open...

8:59EST

MARKET OVERVIEW:

FOMC Economic Intervention (COVERT) policy:

In light of Bernanke's courageously brilliant maneuvers since the CRASH and in my scorecard he's got A+

Although Mother Nature (Economic cycles) thinks quite differently, which is an inherently manifested force within an even stronger more powerful natural economic cycle choking Bernakes recovery plan. Employment is the heart of the economy exceedingly and profoundly effecting economic growth (consumerism), far more important than any other element.

Therefore Benny's only got one card left to play in this poker game.

"NEW ALL TIME RECORD HIGHS"

Mom and Pop see the new's headlines and figure times must be great and help their granddaughter buy a house; etc. etc. etc. etc.........

Benny will lose the poker (obvious) game; not because he's not a great poker player, although he always deals to himself off the bottom.

I hope I'm wrong I need to help my daughter buy a house in upside New York.

Manipulation: The Physical manipulation (Network concept) is far more eloquently sophisticated and developed than one would imagine.

These people are the world's most talented people (hand's down); just the rookie bringing in the coffee is making 450k - and he took a pay cut to get this job. The guy drinking the coffee pulls down triple that, although recently more due to the successful play since OCT. 12 and yesterday morning they plugged up the crack in the leading tower of greenbacks

The Floor:

Ghost town - everything now is Electronic aside from the required physical presence of the market makers.

But let me tell you a story

A guy I worked with (or rather my contact with Stearns; he left there in 4/06; all my contacts with Sterns terminated in May, 2005.

Immediately afterwards he got hooked up on the floor with a two other guys (all partners) and they just smelled and always looking to tear away some fat (wolfs - scalpers).

I supplied them with ES updates - Sykpe - all day long. My fee was juicy.

But at that time (1/08) it was an easy call, sell the bounces. All the major economic cycles were pointing that this was the big one. (IT STILL IS)

They made a tremendous amount of money; I was happy, at the beginning of our contacts regarding my fee (paid in advance) the two other partners refused my request, so I did this "I said $500 a day - for three days - after the three days my fee must be met or nothing."

A week later they happily transferred funds.

March 09 I had it (SPX) reaching 621 min. more likely 575/590; but it bounced 60 quick points; We were hedged from 686 (SPY), and it ran straight up 200 points, our shorts got stopped out at 746; we never added to the long (hedge); because it was heading back down; it never did. in fact the opposite we continuously got stopped out on ALL our shorts.

From 4/09 to 6/15/09; I was wrong 90% of the time; my work had it going back and possibly sideways for a month or two near the previous low.

The last week end of June; my friend from Stearns said this

"Yesterday I noticed a guy hanging out all day doing nothing, ordinary looking fellow, you know common clothes with tired shoes and an old cellular, he just sits around doing nothing and then suddenly he blends into the floor and he buys everything, and then goes back to doing nothing. Well today we're following him, without him knowing. When the lone fellow would buy my guys bought; and the profits rolled in. I had it going the other way, always.

It was then that I realized I must develop a mathematical theorem proving this manipulation and fortunately I was lucky enough to do so.

Times have changed; the floor is a ghost town.

Key note: the EUR/USD traded above 13403 thereby canceling any potential time cycle turn (Equities) from up to down

NDX:

Master pattern (10/2011)

Up price target: 2782.14 (reached on 3/27/12)

Currently trading above 2782.14 confirms the up trend stays intact; none the less the

Intermediate OAV is at 2641.58; in other words above this level then it's bullish

The NDX is a bit more complicated than all the other indices due to it's all time high at 4816.35 and the fact it is and has been clearly trading above the 10/2007 high at 2239.23

In addition it has created a clear cut CT(weekly)

Up price target: 2903.07

Equalizer: 2674.70

Down price target: 2446.32

Support pivots

2724.49 (weekly)

2674.70

2660.93

The NDX (for years) has always topped out well before the other indices and has reversed before all the other indices, as such the NDX is quite pivotal in order to determine the next sequence of events.

IMO the NDX will reverse and begin to head up while the other indices (SPX, DJ-30) correct down

But the bottom line is 2641.58, if it holds this level then one can expect a rally in the near future up to 2903.07 to 3146.78

Until it trades below the OAV my bias is up

OEX:

Master pattern (10/2011)

Up price target: 672.67 (reached on 10/5/12); currently trading above this level

The Intermediate OAV is at 626.56

The OEX is clearly the one to follow if you trade the SPY or ES; because it is always one step ahead of the SPX

The big question at hand is when the SPX reaches 1510.55 and pulls back what the OEX will do?

In the meantime it should reach 696.98

SPX:

Master pattern (10/2011)

Up price target: 1510.55

At or marginally above 1510.55 it should pullback; should because the DJ-30 will not have reached its master pattern up price target and often the DJ-30 determines the major movements and not the SPX

None the less

1379.39 is the intermediate OAV

What happens at 1510.55 is quite pivotal; the options are as such

1. no pullback or quite marginal

2. minor correction

3. major correction (trend change)

The reason being is that the SPX should reach 1611.42 (above the all time high at 1576.09) although the more immediate up target is 1578.02

Between the raindrops hard to believe it fails to reach the all time high, just look at the monthly chart and the channel trendline is quite impressive and add to that the fact the markets have been (and will be) injected with an excess of near free funds.

Therefore 1510.55 is quite pivotal; in the event it does pullback (minor correction) then it should not be below 1422.38

DJ-30:

Master pattern (10/2011)

Up price target: 14164.13

12876.10 is the Intermediate term OAV

I'm on a wait and watch on the DJ-30 when the SPX reaches 1510.55

COMMENTARY:

One must believe the market can only head up in light of the intervention and aid, although excessive cheap money has one major enemy (crude or inflation), therefore if crude runs ups then it presents a risk to the equity markets. In other words only the crude can derail this rally.

Above 100.00 (crude) puts the hand on the alarm handle

Above 110.00 the alarm is rung (inflation)

Therefore next week the crude will be updated more often

Long term (yearly plays) traders consider being long the energy as a hedge for your long equity holdings

12/27/12

8:55EST

It should be quite interesting because yesterday we developed 2 separate patterns of which one is bullish and the other bearish.

Bullish Pattern:

Bottom/Reversal pattern

Pointing Up

Up Price Target: 1440.25

Equalizer: 1418.25

Down Price Target: 1396.00

Confirmation levels:

Above 1418.25 opens the bull door

1421.50 Or higher (1 closing bar 360m) confirms or we're in the bull room

Bearish Pattern:

At 1421.50 we developed a compression detachment which always appears at the beginning of a major move, in this case down to 1341.25

A daily close at or below 1409.00 confirms the pattern (move down)

Commentary:

1407.50 to 1411.50 is a key major infliction level in addition it is a very strong buying support level as such a bounce (1440.25) would clearly be in line.

The last expanding top formation (pattern) failed to expand to upside (Bearish) in addition it failed to bounce from the mini flash crash, 1426.00 is the mini flash crash resistance pivot since 12/21 any and all bounces have failed to reach this key resistance pivot (bearish)

In short all the major markets and stocks are creating a very bearish set-up, somewhat similar to April-August 2011, the only difference being this set-up is far more bearish

Now Term:

On or near such a key pivotal level is always difficult to call especially during holiday trading. Normally this level (without a major news event) would hold upon several attempts with viable bounces.

It failed to reach 1410.50 on the AH although the bounce failed to 1418.75 and 1420.00; which were up targets on new overnight small patterns.

My Bias:

Until it trades above 1418.50 (min.) I'm strongly biased to the downside although in the event it fails to clearly take out 1412.50 (the after hours OAV) this means we're in the very early stages of the ATTEMPTED bounce (1440.25)

Volume is quite light and it doesn't take much either way

If the market heads down as expected then

AMZN: down to 211.50

GOOG:

Down to 600.00

CSCO:

Failing to reach 19.12 is immediately bearish (sell signal) down to 15.00/15.46; now if CSCO stays below 17.25 (weekly closings) then it's down to 11.00

FB:

Down to 13.50 to 14.00

9:28EST

Hopefully we catch a bounce on the open; making it easier

None the less

Here's some of the stocks I'm shorting and putting puts, the price level are the put strike price I'm buying; the closer the price the closer the month I trade

KO:

33.55

34.25

35.43

VZ:

41.00

40.00

38.00

PG:

65.00

64.00

59.00

CAT:

76.50

68.00

IBM:

183.00

below 181.75

160.00

HPQ:

11.00

UTX:

72.00

EMC:

22.00

19.00

TRV:

62.50

JNJ:

63.00

KRFT:

36.00

CL:

93.50

ARR:

5.00

LNKD:

60.00

EBAY:

41.50

BMY:

28.50