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S.P 500/ ES/DJ-30 -Morning Outlook

8/8/12

9:17EST

ESU12:

No manipulation; aside from 2 attempted manipulated plays from 7/31 (which failed); the rally from the 6/4 lows is devoid of any DIRECT manipulation or physical intervention; in other words the market is organic.

We reached (SPX, SPY, ES, DJ-30) the bottom/reversal pattern from 5/30 - 6/4; these bottom patterns have a very high accuracy level and often mislead us; none the less we now start with a clean slate meaning the reversal rally is behind us. The entire move up from 6/4 to now is based on short covering; as you should know by now, short covering rallies are highly unstable animals neither a bull or a bear but animated acorn, none the less majority of the time we reach such a reversal/bottom pattern's up price target; the air comes out of the rally balloon and we head back down, In order to refill the balloon or puncture holes in it. IMO we retrace back down to either the last MAJOR support pivot or to last years major support pivot, it's still much too early to confirm such a move. Later I'll give the exact pivot levels for the ES, SPY, SPX, DJ-30, SML, RUT, NDX

One key note; the SML (S.P small cap 600 index) failed to reach it's bottom/reversal pattern up price target; as such this immediately raises the honey flag.

Now Term: (Today until tomorrow's cash open)

No major change which is down to 1385.75 or down to 1389.00 which activates a small down extension (1385.75) once 1389.00 is achieved it must reach 1395.00 (before 1385.75) in order to cancel the down extension.

Minor change; the decline should expand down to 1371.75; still early but the support pivot at 1388.25/1390.25 will determine if the decline expands or not.

Resistance Levels:

Resistance pivots

1396.75 is the nearest resistance pivot; (already tested 5 times)

1402.00 - untested

Bigger Picture:

Until 1304 (SPX) is taken out (monthly close) the move is up to 1510.55

Later I want to expand on the subject of market manipulation (in depth) too many small traders are misinformed what market manipulation is