Stabalization... Longer outlook

I hate the "B" word.... I try not to use it.

I was on the phone today, talking out some "investments" to a friend. I thought it would be a good idea to throw out my "Forecast" to the blog..... This is part of that list of the ever dynamic, list of things I'm probably Wrong about. But let me tell Y'all what I'm looking at.

The tough thing about EWT(Idiot chart Astrology), Is keeping track of the Time frames. When I write My Bullshit Self Published book on EWT technicals.... I'll tell you what it will be about.

Roughly, The divergence between the ABC Corrections, and the 1-5 Impulse waves. Which give you a healthy look the health of your index.. If you see 1-5 impulse waves in the down trend, you know that you are looking at something very Bearish. and if the Down trends are More ABC... it's a correction in something bullish. Yes everything does end up having 5 waves in both directions.... but the shapes reference the Psychology of the moves. Here is the Wed/thursday correction in the SPY. (above), marked are a "Fairly" healthy ABC correction in a Bullish Trend. It's Not VERY healthy... but it is More healthy than they have been. And Yes... it could be a Rorshack, Technical.

The old Corrections in the Old Counter Trend Rally, Were much different. Also as you look at the uptrend from Friday, It's very healthy, and looks to go Much higher. I suggested that we should get a small correction, back to the 129/128.5 level.... Which seems to be just part of a much larger move.Here is the Daily SPY, Ok volume on friday, very surprising for a friday.. We should struggle a little with the 50ma, Very soon. BUT after that.... The tea leaves read to me that we should get a nice Multi day upmove, maybe monday-wed.... Maybe Tuesday-Friday... Move up to the 132.10-135. Level.... Ok Can I be more specific? I'd say that that blue line at 133.5... or 134... or 132.5... That is where I would look for a turn.....

I'm not calling a top.... What I'm saying is that we should get a nice multi day pull back.. Even a week long pull back...Then we will go after the 200MA... This could be a Great time for us to get a nice "Dead Cat" bounce out of Oil and Gold... I little divergence in my thesis, is that we are at my targets with both gold, and the dollar..... Maybe we will catch that bounce now.. Maybe we won't believe that bounce till next week.... That could be the Catalyst for our Week long Decline.. Or maybe the Russia Georgia thing will be the Trigger.

After that I'd Suggest that we go up to the 200MA, and then we will Turn... and probably Retest.... This will happen some time in the next 2 weeks to Month and a half.... Then we should start the "Christmas Isn't going to Happen Trade"...... My theory.... My (Shit that is probably not going to happen), is that we will start Shorting Consumer names, and crush them for a Month or so..... At which point, at the end of the Correction, we should get a "Bottom" in consumer, and maybe Technology....(unless I'm massively wrong, and they have bottomed already.)

Now.. Maybe we Fail the retest, maybe we "Double Bottom"(Which... Officially is my call(add this to the list of stuff that probably won't happen))... Maybe we just come within 5-10% of that level... and I can still call a victory....

Longer Term, forecast.... Still, The market isn't going anywhere... Inflation will have to be contained, and unless the Fed can pull a Rabbit out of it's hat.... 2010 is as optimistic as I can get on a "healthy market".

Housing will bottom between Now and spring, I'll say it's still early.... We have yet to see any great signs of panic out of the Homies, or out of sellers..... But it should be coming.
My friend I was talking to, We were talking about doing some Preparatory Home shopping. in upcoming weekends... Not to buy, but to get a good sense of where to look for a good rental, and get some "Boots on the Ground" look at my Local Market.

Just some Thoughts... and My Bullshit Forecast... These are just the things... I'll Be "Looking For".... But I will say that we should get a nice Short term run, which should give us a heavy correction.