Watch this bearish crab.....dont say I didnt warn ya

Like I said yesterday, I spent the day closing out longs into strength and actually raising cash for the first time in a while. My dilema is this: theres a bullish butterfly on the spx, and more near term, a 3 drive down thats not quite perfectly symmetrical, but dead on as far as the fib levels (.618 up moves followed by 1.27 extensions down 3 straight times for anyone not familiar with the pattern). And this rally would be the first time we actually broke above the .618 retracement after a leg down, since the top. So there are definitely some bullish technicals I'm looking at. But, we are still within the claws of this bearish crab pattern, I posted a chart yesterday and I'm putting up an updated one today. Of course, like a butterfly, the pattern can be invalidated, or will very very likely fail if the retracement extension leg (usually a 1.27-1.618) moves beyond 1.618. Yesterdays high of 1099 and change got us to a 1.417 extension, basically right between the key 1.27 and 1.618 pattern qualifiers. Based on my calculations, these respective limits are relative to 1081 and 1108 on the SPX. And honestly, I can see this market easily breaking higher today, but the late day pop in the VIX (yes I realize some index expirations and our equity expiration is upon us and probably contributed) and the selloff in aapl makes me think the rally is still more short covering than actual buying. Plus we're at the top of the channel we've traded down in since the flash crash, and the price action at the end of the day was awful. Combine that with alot of front month bear ETF call buying yesterday, and some very very large spx put buys (about 30k contracts at 35 on the SSO, average daily total option volume on the SSO isnt even 30k, and a nice 100k contract at the august 101 SPY strike) have me cautious today. That being said, alot of individual stocks have bullish harmonics you can trade, some particularly strong ones are HD, VLO, TSRA, MSFT (still long this one for now), REV, GSIC, and BK, plenty of others I'm seeing too. But personally I'm very light on the long side, and holding only my euro long with apple puts, and a few of my longer term shorts still on like NBR and MCO. The risk reward simply doesnt make sense here, given the pattern I see and potential bearish implications. At least not from the long side. Why get long here, or stay long when you can wait to 1108 or so to see the bearish crab invalidated? Not worth the 8 points to me. If we get above there, I'll be trading the names above. If we head down, 1085 is key, thats the .618 retracement that we got above to sort of break out of the recent trading pattern. Then 1081 as I said earlier would be the 1.27 extension of this crab pattern, and a break through there and I think we trade 1044 within 3 days. Again, want to reiterate, not making a call one way or the other now. Just saying the risk reward is not good if you're long, but ironicly enough, it moves into your favor if we can go higher today. careful out there

this can crash from here..longs be careful

this can crash from here..longs be careful

Correct but we need to wipe the bears out first to... spike up high THAN CRASH>>>>

you know andrion its going down hard very its just where and when it start to plunge.