I have to try a BOT short signal at this juncture. Why? The reason why is that in 2 days, October 28th, 2011, we find ourselves at the date of the end of the Mayan calendar. This is/was a 16 billion year calendar that supposedly started when life first began on earth. So here we are only 2 days away from the end date of this ‘creation calendar’ after that long wait of 16 + billion years.
Curiously we find the market rallying HARD UP into this calendar cycle point end date. And typically when talking about cycles one should expect price action that is opposite to what occurred previous to the cycle date.
I think there is a chance that we could see the market truly drop like a rock from here. It may take a few more weeks, but it would become more and more probably if 1250 because a failure point. This market needs to be able to get above 1250, otherwise it will take a trip back downtown.
The monthly chart is still on a sell but there exists potential from the histogram for it to turn into a reversal. It will not turn into a reversal if November is a hard down month. We would need to see November be another up month and probably break above 1250 for this market to reverse the bearish monthly trend. It seems unlikely.
The Mayan calendar is built in sections that get smaller and smaller. The last section went from February 15th, 2011 to October 28th, 2011. Interestingly the market stopped its run around Feb 15th, 2011 after a huge rally. And now we find ourselves in a similar type of situation.
I would not be at all surprised to see some quick and decisive VERTICAL downside price action that is persistent and relentless to the downside starting near October 28th, 2011 and then the weeks to follow.