If we are forming the right shoulder of a head and shoulders pattern on both indexes, here are the micro_trendlines to watch....

On the $SPX the highlighted green trendline will be at 1074.72, tomorrow, and for the $NDX the highlighted orange trendline will be at 1727.02. Both trendlines will normally be exceeded slightly before they will stop an advance. If they are exceeded by too much, then obviously something totally different is happening, and the markets have apparently not really topped...

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Comment by BullBearGirl on November 7, 2009 at 10:21pm: They're having problems with my "street" address. I live on a small island and we don't have street addresses here - just community names, at best. I'm sure they'll accept my application, but it might take a little longer.

Comment by Steven Vincent on November 7, 2009 at 6:49pm: Forex accounts can usually be opened in a matter of hours. There is often a need to fax copies of ID and such but it's ususally a pretty easy process.

Comment by victor on November 7, 2009 at 6:24pm: BullBearGirl, don't hope to get that account, if you need it - call them in the first chance, it can be done ungently.

Comment by BullBearGirl on November 7, 2009 at 5:15pm: BTW - I'm hoping against all hope I'll get my new Forex account before the real sell off begins. I'm wanting to get into some of Steven's currency trades. If not, I'll just have to use ETFs until I have my new account.

Comment by BullBearGirl on November 7, 2009 at 4:58pm: Thanks, my friends. I have been accumulating shorts over the past week. We shall soon see.

Comment by Mark Lytle on November 7, 2009 at 4:51pm: Yes, that's true....

Comment by Steven Vincent on November 7, 2009 at 2:47pm: I think chances are very slim that the market will not sell off from here. Volume is declining on moves up and increasing on moves down. 1080 is strong horizontal resistance. The Dow is vastly outperforming the Russell 2000 even during this little rally. The financial stocks have not participated in the rally. Crude oil may be breaking down....the list of indications that this is a topping formation is extensive. None of these factors were in play at the July bottom.

Comment by Mark Lytle on November 7, 2009 at 12:02pm: Just an additional point, taken off of the hourly charts, and assuming this is an A-B-C rally, the A=C targets for both indexes would be, 1727.2 for the $NDX , which is very close to the trendline, and 1076.53 for the $SPX, also close to the trendline.

Comment by Mark Lytle on November 7, 2009 at 11:01am: Hi BullBearGirl,
The $NDX hasn't gone too extreme yet...and the $SPX has yet to reach it's trendline. The $NDX could probably go in the vicinity of 1750 and still be able to reverse under the influence of the trendline. The left shoulder of the $NDX, if that is what it is, had produced a high at 1754.54 on 9/23/09. A high somewhere near there would give symmetry to the H&S pattern and wouldn't go too far past the trendline. I'm not actually predicting this, it's just a possibility...
It's known that of all weekdays, Monday has a slight negative bias, so it could be a reversal happens then, after we reach a slightly higher level...The hourly charts show negative divergence on the MACD histogram and Ultimate Oscillator, but one can't always trust those things over a weekend.
We'll see what happens after the open on Monday, it should be interesting...

Comment by BullBearGirl on November 7, 2009 at 1:23am: Today $NDX closed at 1,730.76. How much higher would it have to go before you would say it is too high to be bearish anymore? Do you look at daily closes for these levels or intra-day?