Wednesday, December 28, 2011


A longer term chart of the indicator I used for the intraday bias is showing big negative divergences with the recent strength of the stock market. I retain my forecast of a drop in prices, the next target for the S&P being 1100-1130, which acted as support many times during this volatile autumn.

Note that TLT, the ETF for the 20 year bond, has been making higher highs and higher lows and hugging its 50 day moving average. The pattern it is forming looks like an ascending triangle, which is a "continuation pattern," meaning the prior trend, up, will resume. A upside breakout may coincide with a stock market decline.


  1. Thanks, George. Great post. I agree with the decline in the new year. Not sure about target.

  2. I plan to go short /TF and SLV around ES 1265 (TF 750) and will pull all shorts by 1210-1220 (or DX 85.7 and VIX 25). I would be super happy to get that trade. I believe this is in accord with what CF sees.