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[thoughtpwr]

Structurally, I see downside in the pattern from 12/15 bottom to the recent top (wave 5), which potentially implies a top is in place. Not that the market can't go higher, but the structure I think we are in, calls for one more down move to 2025 before a retracement back to the levels we are currently at to complete a topping structure, then its all the way down to the Oct lows in a retest. However a strong down move flies in the face of a very strong 1) seasonal strength day on Monday (the last day of a Santa rally) and 2) the First Monday of Month strength. If we are down significantly on Mon, then there is no Santa rally, (it could be argued which one we are talking about from 12/15 - 1/5 OR 12/22 - 1/5, but lets assume the latter); then a strong down Monday portends a rough January. A negative Monday would also be combined with a negative Fri to portend problems ahead. The closing prior to this 5 day period of 2089 started the Santa rally and if we close at 2025, it will have produced a 3% loss, one of the larger ones on record. Thus, Monday should be the "tell" in terms of where the market is headed. If we finish significantly higher (2070-2080), we may rally for the month and put in much larger highs with new money entering the market. For example, my read on BIB, is that if it holds the gap at 123, it could punch through 130 and head much higher 180. However all percentage P&F currently says it goes to 94 first before reaching the traditional P&F target of 180. Another issue is whether a VIX Buy signal could be triggered on an initial down move as it was on 12/15, since we have reached 20 intraday the last two days. As long as the VIX remains under 23, the buy signal is not triggered, so a down move with retracement back to the current levels, should likely not trigger a VIX Buy. If it closes above 23, outside the Bollinger Bands, then its possible to trigger it for a decent rally. That would be something positive that a deeper down move to the 1985-2000 level could produce with a down move this week. Should be an interesting couple of days, with the 30 min MACD and momentum showing a divergence at Fri close, but momentum at zero or neutral leaving either alternative open. On a shorter term 5 minute basis, the MACD peaked just before Fri close, so one last down move is possible, before requiring a counter move to get back to neutral or overbought. If bears are reading this, where do you have your mental stops at this point, since my only stop is a rally that takes us above the channel at about 2070? Thx