V for victory (however short term it may be)

(click the picture to enlarge)

The picture to the left is that of the SP500 (SPX). And theres a picture of Lebron, all victorious. AND YES, it was a victory day. About damn time.

The markets have been going up at a pretty good rate for the last few months. We have yet to see a justifyable pull-back. And that makes me a little nervous to tell you the truth.

Since August, the only thing that remotely resembled a pullback period was that on September 6 and 7. The two day affair would prove to be lost in the weeks to come. Again, today, we had a bearish move, to confirm the almost bearish engulfing pattern that happened on Friday.

Now, the lettering in the above chart. Let's start with Point C. I drew two green lines that enclosed a bullish channel. Last week, the SPX broke out of the channel - bullish (I drew a circle around the breakout). But, I was not surprised that it couldn't maintain the momentum from the breakout. Why? Well, the markets have been going up and up and up without breathing time! Everything is so overbought right now, it seems that the bulls are starting to need some time to catch their breath!

Point A is a support level that coincides with the SPX's high back in May (before the sudden tankfest - eerie, no?)

Point B is also a level that would be a little more realistic considering the price action as of late. However, this also coincides with the bottom of the semi-pullback, back in early September. If the price moves lower than this, we have our classic lower low (which could mean a bearish short term movement) But we cannot read into too much of a bearish movement based on a lower low off of a TWO day pullback - especially considering the markets have been soaring since June.

But at least today showed signs of something that could come in the near future - a nice, healthy, (and much needed!) pull back.

I read a lot of news, and opinions, and a common occurance that seems to come up is how this current action resembles to that in May. I don't make predictions about future events, I just play trends, and until things show otherwise, my friends, we are in a clear bull cycle.

Don't worry about things that haven't happened yet - it causes unneccessary wrinkles (that you don't need)

And that is what went on today in the markets.