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To: Hawkmoon who wrote (40223)	11/11/2012 3:07:42 PM
From: Wayners	Read Replies (1) \| Respond to of 220772

Of course the rising wedge breaks down. See a lot of more rectangular flags these days, not sure why.

To: Hawkmoon who wrote (40223)	11/11/2012 6:43:11 PM
From: GROUND ZERO™	Respond to of 220772

I fully agree, it looks bearish... to answer your question on the "normal downside resolution on a rising wedge pattern," I can offer two things with some historical reliability... Message 28540903 1) Most all wedges and pennants typically break at the 65% point, and it looks like this pattern is just about at that point right now... this 65% break out or break down pattern is so reliable that it has been called the 65% rule... look at other wedges and discover how reliable it is... 2) The typical measured move from the break is as much as the distance from the beginning of the wedge to the break down point itself... this would suggest that the SP could possibly see the 1050 to 1100ish level before this measured move is over... I personally find this almost impossible to believe, but this is the measured move according to the charts... of course, this market first has to break down, so we'll see what happens... it should be interesting... GZ

To: Hawkmoon who wrote (40223)	11/11/2012 7:52:35 PM
From: GROUND ZERO™	1 Recommendation Respond to of 220772

CLOSE ENCOUNTERS OF THE WORST KIND... Champagne bubbles evaporated - and celebratory balloons instantly popped; as the desperate efforts built-up to try 'holding a line' around the 'Battle Royale' 1410-1360 last ditch short-term S&P defense, faded away just as we'd forecast. Now technically a bit of upward consolidation before a renewed downward thrust may be conventionally logical, and may even occur; but we'd put the emphasis on the primary direction, projected to evolve 'lower' since our S&P 1465 short-sale. Maintaining 'skin in the game' on the bearish side of the ledger has been the key since that E-mini December S&P short-sale guideline position play. Even on the Election Day itself we clearly saw one reason why the market would melt-away, and called that rally 'phony': it was persistent strength in the U.S. Dollar vs. the Euro. Further more; there were continuing 'air pockets' in stocks faltering based on earnings; you had the cratering of Apple (details and what's coming redacted); so you contributed to a valuation correction that I clearly stated was 'not' conditional on who won Elections. (Balance reserved for our regular nightly members.) Reading between the lines - we've migrated through the most expensive ever domestic political campaign; the most complex stabilization efforts in Europe; as well as repetitive geopolitical challenges in various global regions; delivering just amazingly minor (balance of comment in our full weekend edition Daily Briefing). And finally; let's realize that nothing about the looming 'Fiscal Cliff' really impacts economic activity (which has been slowly improving aside Hurricane Sandy) that isn't already happening (sort of like the 'feeder bands of a hurricane' already, for that matter, lashing us). My greatest fear isn't that we go over the edge (though of course that would impact the Nation greatly via 'rating agency' downgrades as well), to have funding subsequently partially restored; but that Congress dabbles with a deal, fails to make one, and then gets a sort of 'continuing resolution' that just pushes all the issues months or the better part of a year forward. Doing so I fear would simply retard CapEx and other spending plans and enthusiasm even more. (Balance redacted in fairness to subscribing members.) Daily action - technically continues to have a market adhering to game-plan; as it basically rallied into Elections and then folded; trying now to temporarily hold. As we provide 3 videos today (summarizing reactions to events and technicals, with different videos showing intraday, daily-basis and weekly-basis charts); we will now review some of the prior comments of the week; which set-the-stage for a phony Election Day rally; then expected downside 'Battle Royal' penetration. Prior highlights; charts & new videos follow: Resolving the 'fiscal cliff' - or at least postponing it; actually is not the key issue surrounding the market currently; though it is almost universally portrayed as such by the media and analysts. It's not even a question (such as we warned of a year ago, that it was about Europe ahead of the U.S. with problems, hence) of relativity. Rather it's a question of creating an 'anti-Debt campaign' and realizing that other methods are palliatives that may provide less short term pain, but defer long-term gain. Stop-gap measures that take us into 2013 for the 'cliff' remain capable of (sorry what this would mean and the pattern are member forecasts). Furthermore; on both sides of the Atlantic there incredibly huge 'derivative' hangovers remain; that aren't being discussed (we've shown the leverage charts and distorted ways this suggests bank reserves and stability are often illusory). Bottom-line: be very careful when your hear investment 'consultants' urging buys in this market based on 'value' and especially 'seasonality'. They typically tell folks that this is the 'time of year' to buy (and it often is; we've explained why it's truly a different animal this year; for reasons clearly outlined for members). (An 'overlay' chart with comments contrasting 1987 and this year is reserved.) Close encounters of the worst kind? That takes us full-circle to the 'fiscal cliff'. Postpone it into 2013 (early or the worst would be a full year to work on tax and budget reform) and you get what? (redacted; the point of these highlights is to describe what we discuss with our members; providing topical but little analytical detail unless you're a member). And that takes us back to European Socialism? How so? Without optimism and an historic American dynamic to push this Nation forward, you not only don't create a lot of jobs; you cannot achieve the kind of growth rate we need to tackle the Debt. And incidentally; that's the point: even Europe is too indebted to tackle it and still provide services their citizens have come to expect as 'entitlements'. (Updated Apple chart comments; noting what happens if a certain level breaks.) Conclusion: You can (sorry; it's a forecast beyond what's already shared; so is redacted). The indicators (declining momentum and participation tops and so on) proved it as we noted; and our effort (despite people trying to convince me otherwise) prefered an influence from facts; not rationalizations stretching a false rally. That's why we noted several times this Fall, that a rally based on the Fed's policy that even they realized leaves risks skewed to the downside, was a reckless rally. I said so and noted that the catch-down would be more painful because of the folly of Fed facilitation of an artificial investing environment. (Some of what we've been talking about; just before the Election): a) low and inadequate 'aggregate demand' presently or in the near future; b) insurmountable Debt problems which could be cured by faster growth; c) further unraveling of the well-meaning coalition spirits in Europe; d) over-bloated stock prices here catching-down with earnings realities; e) an S&P that should be priced relative to multiples in slow-growth eras; f) an understanding the 'rule 20' idea tying high S&P to low yields is temporary; g) too many variables to conclude the market somehow rallies after Elections; h) later, you could (redacted) 'fiscal cliff'; but again only (redacted); i) there is no assurance that will occur; and there are geoeconomic issues too. decisionpoint.com Message 28541023 GZ