12-08-2011 outlook

I projected that today would be neutral to down biased.  Well, we were down most of the day and closed mixed.   Guess I should have said down to neutral to have the order right.  Hehehe

Tomorrow should be a transition day.  Could we break the 1266-1267 level and run to 1292.  We could, but I think that would be premature.  Fact is we are still at an elevated level based on the 40TD DPO of 140 points (1158 + 140 = 1298) at 1260.  IMO the market is about 30 points ahead of the expected level (10 days x 7 points = 70; 1158 + 70 = 1128).   So it seems to me we should go up about 40 points and could go down about 30 points between now and Dec 22.  May get some volatility with Friday being OPEX triple witching. 

I suspect we may see strength into the 20TD top (break above 1267 and get the bulls all excited?) then pull back toward the end of the day (get the bears all excited?)  Something for everybody with a moderate down day as we get the Europe plan for a plan in March and options expiration on Friday.

The 10TD, 5TD and 2.5TD cycles bottom tomorrow.  The 40TD cycle is up.  The 20TD cycle tops. 

Here is my interpretation of the SPX swing cycles:

GL traders.  Be careful - I expect any pullback (if any) to be very moderate as the 40TD cycle continues up.  This is partially based on looking at the Russell Inverse ETF (RWM) and the chart seems to indicate more downside (market up),  Here is RWM: