SPX monthly update
Left hand on the monthly chart you see how the top in 2007-8 unfolded, we have now an almost exact return of that pattern with the step one month drop in January 2008. We also have almost the same sentiment situation now quite bearish which will make an immediate follow through very unlikely as back in 2008. We have entered month 4 in setup counts and usually the 4-6 are a consolidation phase. Hence supporting the idea that after this wave 5 down we can expect a 1-2 month upside consolidation. In 2008 from March to May SPX went up 10% followed by the real ugly crash part. The difference now is a striking one though as the 200 month MA was the support of the current downmove and we have the 50 month MA moving towards the 200 MA while producing sell signals on the MACD and CCI. That is a very explosive situation technically supported astrologically as Saturn will go square the US Pluto which is the most destructive pattern and in the US case combined with Chiron forming a T- Square. Q4 is just a matter of time before we see a crash like scenario and it should be also combined to a sell off in US bonds. On top of that we will have also a major EURO crisis at hand as the natal chart of the EURO has a Venus Saturn square which will be challenged by Saturn starting around November. Christmas season will be during full distress as another clash of Jupiter and Saturn comes up as well. Looks like Gold will crack the 2000 mark this year. Coming back to the short term picture wave 5 should test the 1100 level in Europe new lows within 2 weeks right after a 10% run up within 4-6 weeks. Followed by a challenge of the 2009 lows in the next 3-4 months thereafter, hence Q1 2012.