Thanks to scooter for posting this updated AdvancedGET daily chart of the S&P 500 futures.  There is a rather large make-or-break (MOB) zone at the 980 – 1,000 century mark.  This target level was originally called in the Advanced GET blog postings starting on July 16.  At that time, the Elliott wave count was putting in an intermediate term wave 4 low.

Once again, we are looking for signals of an ending 5-wave count and trend change.  This should be accompanied by a clear divergences of prices vs. momentum – higher prices, lower momentum compared with the previous wave 3 highs.

Back on November 5, 2008, this chart outlined the ascent and breathtaking fall of the Shanghai Composite Index.  This pattern played out a mere five years earlier in the Nasdaq Index.  The key to the bottoming process was the breakout of the steep down trend line – the Chinese markets registered this signal a few day later and on November 22, 2008 I noted that it should lead the global markets.

Nine months later from the original post, the SSEC Composite is up an astounding 83% from the lows around 1,700 to today’s close at 3,145.  Over the next weeks, expect there to be consolidation sequence due to both gap resistance around 3,200 and pocket resistance up to 3,500 as seen on weekly charts.

The markets tested the neckline of a two-month head & shoulders setup.  There was no decisive break and the markets should now test the 20 day exponential moving average (purple line).  Note how this has provided support well into the June timeframe, with the latest round of consolidation between the neckline at 870 and shoulder of 920.  Yesterday produced a ‘wr7′ signal – widest range in 7 trading sessions.  Expect today to produce a very narrow range, perhaps an ‘nr7′ – narrowest range signal.

12:00 pm update – An intraday test of the 900 century mark and 20 ema levels.

The market is now at a critical juncture.  Internals suggest that the intermediate term defensive / capital preservation team is now on the field.  A head and shoulders pattern (rounded top) is now visible on most major indicies.  Today’s price action will most likely confirm this setup on an impulse move.

From Matt Taibbi’s “The Great American Bubble Machine” in Rolling Stone Issue 1082-83.

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They’ve been pulling this same stunt over and over since the 1920s — and now they’re preparing to do it again, creating what may be the biggest and most audacious bubble yet.