11-11-11

Ok, so I did a stupid thing.  Something I said I wouldn't do again.  I took 44% off yesterday at the close and remained only 56% long.  Dumb, especially in light of my ranting about making a slightly higher high.  Do as I say, not as I do would be appropriate.  Ok, now that I got that out of my system, let me make this one observation.  In May 2008, after a 2 month rally from a lower low (just as we are in the middle of) the market made a bearish divergence as the last push up marked the top.  From a time frame perspective, that would take us into early December but let's put that aside for now.  The recent two sell offs have provided investors the opportunity to put that scenario on the table as MACD has been damaged enough so, that if the market was to chop to a slightly higher high (say, 1305ish 78.6% Fib level) it would still be lower than when the market last touched 1292.  If daily MACD then crossed back over (negative) that will be the bearish divergence that an investors looking to get short would be dreaming of as it would match up with the scenario in May 2008 when the market topped.  The two charts are below.  Take a close look at MACD on both to better understand the point I am trying to make.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p83737992130&a=243753337&r=2839&cmd=print

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2008-03-03&en=2008-06-02&id=p57933942160&a=248174651&r=2522&cmd=print