SPX technical long-term outlook - in the 4th inning, part 1

The basic pattern, as we can see here, is the famous double top for starters and we are about to reach the 61.8% retracement at roughly 1080 from the Oct. 2002 lows. Since this is not a correction within an upside trend, it will not mark the lows. Within a time frame of 5 years, we have at least 2 more years to go down. Therefore, this will happen in waves. The current wave is having a 1 year anniversary next week and is in the final part of the current wave. It may take up to 5 more weeks - why do I say that? From the top in 2000 to the first severe low, it took 13 months. Furthermore, the exact Uranus/Saturn opposition is on November 4th, which happens to be election day. This adds to all the unnerving factors, since markets hate in times of distress to have unknown major factors, hence it tends to factor in the most possible negative outcome. The good for markets is not neseccarily the good for a nation in distress, therefore Obama leading in the polls will not help (do not get me wrong - that's not a political statement ). The SPX broke out of a channel by a small margin as well as out of a descending triangle, which indicates negative momentum increasing. We are, however, close to the end of this down leg in a cyclical constellation as well as in a price support way, as we are deeply below weekly bollingers and about to penetrate monthly Bollingers at support and Fibonacci levels. We also produce at these levels TD combo 13's on a daily basis and also indicate by sentiment and other indicators that we are close to a temporary low. Ideally, the week should start with a weaker opening and likely they will and we need to itch up a bit in the VIX, as well to complete this low pattern. A 10-15% wave up will follow but overall we need to fall again until we see a more severe low in late Q1 2009, as we are heading to retest the 2002 lows at some point within 12-18 months and even go lower, as I will show you in part 2.

A very comon sense approach everyone can consider is just the simple fact that we are in times of extrodinary distress with big Wall Street firms being wiped out and unprecented events on a daily basis. The markets need to trade at single digit PE's (multiples of their earnings). Even as of now for the SPX with earning remaining the same, the SPX needs to trade 30% lower and, if you work in decreasing earnings, think of what that will do to the markets.