Morning Audibles 5.25.10 - An "Uncontrollable Urge"

CV "shorted"(with SPXU) very late yesterday afternoon into the close (3:46 to be precise)...


The "timing" was pure luck, but the decision came about from looking at a different set of charts in the afternoon (out of boredom - as I'd been waiting for a "melt-up" to 1095-1097 all morning & afternoon)...


Here's what I saw...

All of a sudden, the market seemed to be struggling with the 1082 level (that's why I started to look around at different charts because that level didn't particularly mean much to me at the time)... On the chart, it appeared that a "triangle" was ending. It was either going to end on the days close, OR, the next day (which many of you know know that I was talking about "Next Tuesday, Next Tuesday" - which is DAY 21 from the 1200 high and DAY 13 from the "flash crash")...


Triangles are ALWAYS formed on charts, but this one seemed to bear added significance... Two of the lines on the triangle corresponded with the two largest UP buying frenzy days since the March '09 rally began (I've annotated those on the chart)... The LARGEST was the move last July (which was something like a 23:1 up day...


In any case, it seemed to me that the market (into the close) was about to give up the highest momentum days of the past year... This had "briefly" been done during the FLASH CRASH, then again last Friday, but the "invisible hand" saved the market going into the weekend... Mr. Market seemed DETERMINED to get to this level... 


Here's what it looked like on 1 minute charts... (that last GANN line was the failure point)...

So basically, the market needs to search for a new level... Anybody could offer a good guess as to where that might be... Here are some possibilities:


- 1044 = February Low
- 1042 = Major FIBO extension (from 1220)


And of course there are others... 


Something that I don't think should be discounted is the 905 level... Why? Because that was the 23:1 "up" day last July 15th (where a chart gap still exists)... That level would also provide some interesting possibilities... A 78.6% retrace (from 905 back to 1220) would take you back to 1150 (which has already been established as an important level)... I'm just thinking ahead here...


Perhaps we go back up a little first and backtest some of the breakdown levels? Or perhaps the attitude will be "sell now - ask questions later"... That's for you all and your UNCONTROLLABLE URGES to navigate...