Sorry there has not been much posting lately. Holidays have been fun and while I have been keeping up, I have not had time to do in depth analysis, except a little at nights. Anyways, we stand on a pivotal turning point. Let me explain the talking points on both sides of the field. I am short term bullish, but I am about a half position on upro, so I am being very cautious.

BULLS: 
1.) The market is oversold. The worry of course is the fiscal cliff. If you take this off the table, the macro news is not that bad. It's not fantastic either, but it's more positive than negative.
2.) We are sitting right above the 200 day SMA, around 139.3, which also happens to be a terminal 5th wave down point.
3.) STO is 14.23, suggesting a good buy point.
4.) With respect to the fiscal cliff, the republicans seem to want to play ball. The Democrats I think do too, but they are playing hardball since the blame (for whatever reason) will fall on the republicans. Doesn't that seem like a bit of irony there. Anyways...
5.) $NYMO broke under it's lower BB. This is a very good buy signal. It is generally very reliable, although occasionally a day or two off, so don't be scared if we still drop to 1393 on SPX.
6.) Calls to Puts CPCE is not very high.
7.) The market usually crashes at tops, not at local bottoms. 
8.) There is a good level of VIX to wear off.

BEARS: 
1.) The VIX/VXV ratio is over 1.00, screaming do NOT buy.
2.) We are right at the VIX long term TL and the SPY long term TL on 20 week EMA. This is historically a very good indicator that something bad will happen. 
3.) Volatility is high, but can go WAY higher. A .382 correction would see SPY at 118-ish and VIX at 50-ish. Risk reward is there, but not great.
4.) MACD negative crossover, pointing down.
5.) This fiscal cliff thing is not over.

End result: Cash would have been better, but since I am in UPRO, I will stick with it. TNA, XIV and TQQQ look more attractive than UPRO if you are in cash. I would wait for either a confirmation on Fiscal cliff or 1393 in SPX, but outside of that I think they are acceptable buy points.



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