BA to 68.75

Back in August when I strongly suggested that the markets were about to turn over and the next bear leg was beginning, I was wrong. I mentioned that if the QQQQ moved with strength above 47 that the downside was off for the time being. Upward momentum is now waning, but I believe there is still potential for a few percent rise in the markets. The Dow Industrials may be looking to touch the 11,750 range which was the 2000 high. On the short term, Boeing (BA) has a decent looking Elliott wave form and some short term upward momentum (caveat.... daily momentum has not turned up yet). I predict that BA will move up to 68.75 within the next week or two. Next target for the QQQQ is 57.

Head and Shoulders and Elliott waves.

It appears that a "head and shoulders" top has occurred over the last 8 months. It is quite symmetric and the most recent wave up is a beautiful "ending diagonal". If this ending diagonal is the C wave of a flat correction then the next few months will be a very strong move downward. I am 85% confident that this is the correct elliott wave analysis. Only a strong move above 47 in QQQQ would negate this analysis. In the very short term (hours to days), expect QQQQ to go up to 46.25 area before falling hard. Most indices and sectors will join the Nasdaq in this bear market. Do your own due diligence. If you don't find any compelling reasons to stay in the market, then sell your equities and don't expect a significant bottom for a couple of years at least. On my last post I mentioned that BA would go to 71.50 range before turning down. It didn't make it that high and mostly likely will not.

Boeing as a bellweather.

Look for a Boeing (BA) reversal in the 71.50-72 range as a sign that the next leg down is underway.

Out of gas

On my last post I suggested that the S&P 500 could go as high as 1150 during the retracement. I believe that the mid range point of 1131 seen today is the top of the retracement. Numerous factors suggest such. Staying below the trend line is essential for continued bearishness. Next stop should be 950 within a few weeks (25% loss). SDS is a leveraged inverse fund for the S&P 500. Non-leveraged short of the Dow Industrials is DOG.

Caveats: some charts show individual stocks that point to new highs. However, most evidence is to the contrary. Get out!

Respite

Looks like it is time for a retracement. As always, we never know exactly how far up it will go until it nears completion. Target range - 1090 to 1150 in the S&P500.

Running into resistance.

The drop last week was so scary that someone had to make up a story about a goofball broker hitting the b instead of the m when placing an order. That's ridiculous. And now the SEC can't find the cause for the 1000 point Industrials market action. That was just some very jittery feelings about Sovereign Defaults coinciding with people fatiguing from exuberance.

In Elliott wave speak, we have an increasing possibility of a 3rd wave or C wave down. The price movement can be similar or stronger than 2008, depending on the form it takes. The first leg down nearly hit my 1050 target in the S&P (1065 ish) and occurred much faster than I thought.

Here are some resistance levels to keep an eye on... AXP 45, Vix 23-24 (support), AAPL 265, CAT 69-70, DD 40, SPX 1180, Dow Indu 11000. These stocks and indices are almost certain to have a sharp downturn at these levels. If the downturn is blunted or they cruise up through these levels, then the bear will probably have to wait. If the turn is sharp and consistently downward over hours, do not be surprised to see a short term (days to a week or two) drop of 20-25%. There is the potential for a "crash".

MCD hit Target, Upside potential limited in Equities

The S&P500 and the Dow Industrials are hovering around the 61.8% retracement from their all time highs. The S&P 500 has encountered strong resistance at the 50 month and 200 week moving averages. The potential for much more gain in price (1250 still possible) is far outweighed by these and other factors. MCD has reached the 70 dollar target. It has some potential for further gains, but selling around the current level is appropriate. UUP (dollar bull) has been consolidating sideways but should resume upward movement soon.

Update -- Dollar making the right moves.

Updates from prior calls...

1. Short term trade of ABT puts... Nov 29th recommendation to buy puts at $1.50 and sell at $3.20, initially they went as low as $.90 before moving to $2.30 when ABT hit 53. They were $1.85 at expiration.

2. MCD now around 62. It got as high as 64. Still holding onto stock, hoping to sell at 70, but expecting sideways movement between 60 and 64 for weeks. First recommended MCD on 9/23/09 at price of 55.54.

3. Nov 27th call.... Expecting S&P500 to start a new Bear Leg. Waiting for confirmation with a close below 1070-------- This has not happened yet. The indices continue to be without strongly identifiable patterns. Some individual stocks such as Dupont have identifiable patterns. DD to 30 in about a month. (80%)

4. The dollar made its initial leg higher from the bottom on 11/25. I said it was moving higher on 11/27/09. It closed at about 75 that day and now is at 77.51. Expecting continued strong upward movement in the dollar over the next year, and is now finishing a consolidative phase. UUP is an ETF to buy. See the chart. (90% confidence)