Equities indices still make higher highs as questions mount about bearish signs

As Gerald Celente, a forecaster, was just on Fox Business tonight predicting the "Crash of 2010",* the S&P 500 made another spike high this morning only to fall down again this afternoon. I'd thought it might trace out an intraday triangle, preparing for a thrust up to 1133 or maybe a bit higher tomorrow or Thursday. That doesn't look like the pattern, but it's still making higher highs and higher lows day by day, as you can see on the SPX 15-minute chart below. Remember this index is dancing just above its 50% retracement to its October 2007 high. So if and when it drops back under that level (which I've got noted as 1122, and some mark it for the SPH at 1126), it can be legitimate to treat it from the bearish perspective unless it rebounds above it again. So, its path from here really is important.

Speaking of triangles, look at the TLT weekly chart, below. I know Tony Caldaro has Treasuries marked as making a "C" wave down, and I'm on board with that. But it needs to break under $86 to confirm (for TLT). It will be interesting if it's working out a triangle that pushes upward instead. So far, the indicators are consistent with a standard triangle and don't guarantee a breakdown under the mid-2009 lows.

Another weekly chart that relates to the equity and bond markets, is IYR (an ETF for real estate), below. It's just tagged a .618 retrace level to a prior swing high on that weekly chart. If it can push higher, there's a 50% retrace level to its all-time high, slightly over $50. Either way, it's clear that IYR is vulnerable at these levels and can be subject to a trend reversal. Buying volume is shriveling up. On a reversal, the question will become whether a turn down will be merely corrective or point to new lows. There are some who argue that real estate may continue down into 2012, and perhaps well beyond.

So - this is once again a time to see these key markets as being at important levels. How these markets move from here will say a lot about what we can look forward to in 2010.

* For our own views for 2010, we're looking at how the SPX reacts here, but willing to go along with the ideas described in prior posts here about higher levels into mid-January, with the idea of weakness for a couple of months after that. And then, the possibility of higher highs in May and/or August, followed by a real crash ... Of course, if the SPX drops back under 1122 and can't rebound back above it, that will be more immediately bearish. Will see! And obviously will fine-tune as we go.