Wish we knew.

We respect the downtrend and are trying to remain flexible.

We do know fiscal cliff worries are dominating the market, the S&P500’s medium-term uptrend is broken, and the 200-day moving day has been violated.   We now  look to the Fibonacci retracement levels as the next key levels.

The .618 retracement level of the June-September 208 point rally is 1346.1, which held today.

The .382 retracement of the October 2011-September 2012 400 point rally is at 1321.8 and the .50 retracement at 1274.5.

If the June 1266.64 low is violated,  we really have a problem.

Still don’t see the panic that is usually associated with a bottom.

Cliff diving is no fun, at least, for most.

(click here if chart is not observable)