SPX/Market Thoughts For Saturday 12-4-10

SPX (S & P 500 http://bit.ly/i0nsT)/Market Thoughts For Saturday 12-4-10:

The two most important SPX/market indicators, the Euro and the SPX Volatility Index (VIX), are very or extremely bearish on a short term, an intermediate term, and a long term basis. Also, the Euro appears to have put in an Intermediate Term Cycle High at 142.81 on 11-4-10, see http://stockcharts.com/charts/gallery.html?s=$xeu. Once the short term Euro bounce peaks I'll be looking to trade SPX short via the SH ETF.

The five day Euro ETF FXE Lead Indicator is very bearish, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=v&a=ss&c=fxe. The three month Euro ETF FXE Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=^GSPC&t=3m&l=off&z=l&q=c&p=v&a=ss&c=fxe. The two year Euro ETF FXE Lead Indicator is extremely bearish, see http://finance.yahoo.com/q/ta?s=^GSPC&t=2y&l=off&z=l&q=c&p=v&a=ss&c=fxe.

The five day SPX Volatility Index (VIX) is extremely bearish, see http://finance.yahoo.com/q/ta?s=^GSPC&t=5d&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix. The six month SPX Volatility Index (VIX) is extremely bearish, see http://finance.yahoo.com/q/ta?s=^GSPC&t=6m&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix. The two year SPX Volatility Index (VIX) is extremely bearish, see http://finance.yahoo.com/q/ta?s=^GSPC&t=2y&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix.

This past week SPX (S & P 500 http://bit.ly/i0nsT) had a big spike move, that appears to be the Upcycle since the recent 1173 cycle low peaking, and, since 8-27-10 SPX has had a huge gravity-defying spike move, with the huge VIX/fear spike from the 5-5-10 Flash Crash being a huge bullish factor, see http://goo.gl/fb/aYD76.

It's very doubtful that SPX would have taken out the 4-26-10 1219.80 cycle high were it not for the huge VIX/fear spike from the 5-5-10 Flash Crash, see http://finance.yahoo.com/q/ta?s=^GSPC&t=1y&l=off&z=l&q=c&p=&a=fs,p12,fs,w14&c=^vix. There's a good chance that SPX's Major Upcycle since 3-06-09's 666.79 Major Cycle Low will peak soon.

The non-contrarian SPX Commercial Traders went net short by 75,000+ futures contracts the past few months, see about 2/3's of the way down at http://www.cftc.gov/dea/futures/deacmelf.htm.

Quantitative Easing began again recently, which is a major bullish factor however. Weekly Fed Credit = +$426 Million on 12-1-10/+$24.277 Billion on 11-24-10/+$3.958 Billion on 11-17-10/+$8.470 Billion on 11-10-10/-$1.986 Billion on 11-3-10/-$1.039 Billion on 10-27-10/-$9.375 Billion on 10-20-10.