How do you camp?

So it appears, as usual, that the financial markets are divided into our standard two camps, bullish and bearish.

Over in the bearish camp, where, as many of you know, I have been firing up some high-quality bison burgers for my bearish brothers. I have the hammock tied between two select trees, and I have my bug screen firmly tied over my picnic table. What is there left to do but wait and bask in the coming glory that is the sunshine?

Meanwhile, across as river, and up the mountain are the blundering bulls. Notice that the bearish camp is waiting patiently, while the bullish camp, which includes the financial media, most traders, almost all investors, and quite a few well-respected newsletter writers/blog hosts. Maybe there are just so many people in that camp that they have to mull around, but I think they are really busy trying to take every ‘little’ upward rally as another excuse to try to catch the moon. The bulls are antsy. They ‘know’ that we have been making higher highs and higher lows.

What they don’t know is that while we having been rallying higher, we are still below the Jan. lows, and barely could muster the strength to touch the underside of the March lows. Perhaps the market is just making sure previous support is now resistance?!?

Given today’s action, I am starting to see some movement in the bearish camp, and with good reason. I am sure some of the bulls would like to call our “sit and wait” method complacent, but the real complacency is in the people that are still bullish after lower highs and lows. See, as far as my bearish stance goes, I knew that the $INDU could push as high at the 12250 level. In fact, that was my first target, but I had to lower it considering the utter lack of strength in these rallies. So, if anything, I have a reason to get excited.

With the $INDU down about 180 points, knowing the location of those pesky upward-sloping trendlines, and knowing the time proportions I laid forth on Thursday are ringing quite true at the moment, things are looking good. The $VIX, while not issuing the standard jewel of my eye, the “sell signal,” I think it is safe to say that the intra-day H/S top was not real or is not going to play out.

Here’s a chart of where we stand with the trendlines…

So, the long awaited question is targets. How far will we fall? How fast will we get there? Do you really think $INDU will break 10K? The answer to the last one is abso-freaking-lutely!

Here’s what I have drummed up thus far. Please note that these targets will continue to get refined as I continue to get data. But as of the wave 2 top, which occurred on 8/11 in $SPX and $INDU, and $COMPQ on 8/15, here is what I have.

$INDU = 10777 is a first target. Short, sweet, and the July lows!! If this is wave 3, the highest level the entire pattern should end at is 9558.13. As far as time goes, this decline should be swift and persistent, likely chopping of 10%+ in a matter of weeks. When more form develops, I will be sure to key everyone in on probable time scenarios. At this point, let’s just concentrate on getting into some bearish positions before we get left behind.

$SPX = 1212 for a first target, expecting a push to test July lows! As it stands right now, $SPX has a strong confluence of fib levels at both the 1150 and 1050 ranges which would represent additional near term targets. For the $SPX the highest level final target would be 1073, which would be around the 1050 range.

$COMPQ = 2252, which targets the mid-July consolidation. This target is a little off in position when compared to the other indexes, and hasn’t completed enough smaller wave for me to feel comfortable offering a different target. The highest point this move can stop at is 2089, which is just below the July lows. I see us falling much farther than that, but at this juncture, that is where we stand.

Did anyone notice the classic evening star pattern on the $COMPQ, or is that just me?

If you have been watching, we have been throwing out little tid-bits here and there. For those that have followed astutely, BOOM, BIDU, and CME have all been performing nicely today. NIHD is ripe for the picking here too, but wait for confirmation.

This is just an intra-day update. Yes, I know, tons of information crammed into an intra-day update, but don’t worry. I will be back this evening with our standard follow up. Until then, enjoy this slide!!

Skol!