*** Before I start here, you may want to review my last couple weeks of blogs if you are not familiar with them. We have two different plausible scenarios playing out. I suggest protecting your investments carefully when there is a possibility of capitulation around the corner, you can draw your own judgement.

SPY weekly charts
Price: 141.35 
Risk to Reward considerations: price about 6% under the 52 week high, about 8% under the 2000 high and about 10% under the 2008 high. The 2009 low was about 55% under the current value, and the 2003 low was about 44% under the current value.

Bollinger Bands
Hi: 147.60
Mid: 141.05 
Lo: 134.51
Action: Last touched top BB, came close to bottom and seemingly bouncing upwards, but did not quite touch. We are slightly above the mid BB within a week of the low.

MACD: positive
histogram: negative, but ascending
Notes: Descending MACD peaks. Prices increased during this period creating a divergence. Histogram wave decaying since Aug of last year.

RSI: 54.05, coming up from under 50. The low value a week ago was nearly identical to May 2012's low, which was a true low. It is also about the same value as May 2011, which 3 months later developed into a 38.2% retracement. While I do not trust the market, the RSI compares more closely to May 2012 of the two historical checkpoints.

Moving Averages
50 EMA: 135.92 Notes: Price deflected very convincingly off the 50 as in May, with only the wick piercing it and a solid movement up the following week.

Technical Analysis: Between the hammer reversal off the 50 week EMA, with comparative RSI to May '12, to reversal in MACD histogram and low STO value (24) to the price action seen in last week's movement, this is a confirmed reversal.

Suggestions: Based solely on this, bull swings are most likely to succeed and that very well may the case in the very short term. The weekly VIX descending wedge remains a concern for me especially for the month of December, so I cannot jump fullheartedly into bull. Despite my bearish stance, I do semi-expect prices to jump quickly back to the 150 range within a few weeks. It is at this point the market may more likely lead to a very large capitulation as in 2000 and 2008. However, there is no golden rule that price must go back to that level, and thus the market remains in a worrisome state. Additionally, the quicker and more rapid the rise in price back to old highs, the more likely the market is to enter a disorderly sharp correction.

Lastly, with respect to risk/reward, we are 10% under the high, and nearly 55% over the low. But... that 10% leveraged is nearly 30% to 40% gains in a 3x leveraged etf or through inverse volatility. It comes down to greed versus risk protection. Two things to remember at this point:
1. Money is precious, opportunities are limitless. Conserve Money. If you play bull or bear right now, do it limitedly.
2. Hogs get slaughtered. Do not be a hog, the seemingly easiest dollars can be the most dangerous. Mr. Market does not have good intentions with you.



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