Now, that window is nearing expiration. This does not mean the market will roll over from here, but it does mean that shorter-term time frames, daily and weekly, may be ready to exert more force on the market. Thus, we will want to pay attention to two levels on the daily chart.

Daily: On the upside, the 944.43 level is a critical level that, if broken in a qualified manner, would tell us the probabilities have increased that the rally will be longer-lasting than many expect. On the downside, a qualified break of the TDST level at 847.12 would tell us the larger downtrend is now likely to resume. That's a large range.

Weekly: We can reduce the size of the range by combining our analysis with weekly charts. The weekly chart shows a very important TDST Up level (resistance) at 890.40. Wait, how can a level that has already been breeched act as resistance? Because it has not yet been broken in a QUALIFIED MANNER. Remember, the rules for qualification are a down close (we are talking weekly time frames here, remember) followed by an up close above the level. Then, we must have an open above the close and at least one tick above the open. IF we close this holiday week above 918.90 AND we open above this week's close next week and tick at least one tick higher than the open, that level will be broken in a qualified manner. This would tell me the probabilities have increased that 944.43 is subsequently broken in a qualified manner and extend the window of positive market forces by 10-12 weeks.

Bottom Line: On a daily basis, support is 847.12, resistance 944.43. A close this week above 918.90 will set up the possibility for a qualified breakout for SPX on a weekly basis, which would extend the window of positive market forces.


4) Still Funemployed... for Now

Referring back to Five Themes and "The Point of Recognition," yet another sign we are still not quite there is this whimsical take on being unemployed, or as the young kids say, "funemployed."

http://www.iloveblocks.com/funemployed.html


Meanwhile, as this article from the Wall Street Journal points out, “Only the Employed Need Apply”, "funemployment" may soon lose some of its whimsy.

"With unemployment at 9.4% and rising, it’s a buyer’s market for employers that are hiring. But many employers are bypassing the jobless to target those still working, reasoning that these survivors are the top performers."


5) News & Weirdness

Yay! Yale's Shiller Sees `Striking Improvement' in Rate of Home-Price Decline  - Bloomberg
Home prices rose in eight of the cities measured on a monthly basis, though they declined in all 20 cities year-over-year.

Dang! FICO Scores Show Flaws as U.S. Banks Cut Consumer Credit Lines - Bloomberg
“Reductions to a consumer’s line of credit based upon the lending institutions’ overall appetite for risk has little or no bearing on a consumer’s own risk of default,” Luis Gutierrez (D - Planet Mars, apparently), chairman of the House Subcommittee on Financial Institutions and Consumer Credit, told Bloomberg. That statement is demonstrably untrue on so many levels it's hard to know where even to begin.

AIG Has `Excellent Chance' of Repaying U.S., Chief Liddy Tells Investors - Bloomberg
“We believe there is an excellent chance that we can repay the government,” Liddy said. American International Group (AIG) has received four bailouts, totaling $182.5 billion.

Similarly...

Dear Citibank -

Do you remember that credit card you guys sent me a couple of years ago? The one with the huge balance I ran up on dinners, vacations, airline tickets, sporting events, clothes, personal electronics and stuff? Well, good news! I believe there is an excellent chance I can repay you!

I have heard that in many capitalist societies it is customary for banks try to determine whether someone can repay them before they extend the credit. Thank you for making an exception in this case!

Corn, Soybean, Wheat Futures Plummet as U.S. Farmers Increase Crop Acreage - Bloomberg
Sowing the seeds, literally, for deflation. Corn acreage was up 1.2% from last year, oilseed acres a record at 77.483 million, spring wheat acreage exceeded projections as well, at 13.77 million versus 13 million projected.

Japan Offers $1.7 Billion Bailout for Chip Maker - NYT
Look, the Japanese, they're just like us! "In its first major industry bailout since the start of the global financial crisis, Japan said Tuesday that it had put together a package of $1.7 billion in public and private money to shore up a troubled chip maker, Elpida Memory."