"Melt-up" vs "Melt-down"

There appears to be an equal potential for a 'melt-up' or a new cycle down. Professionals and institutions are selling off what appears to be a topping process, and adding short positions. Given the recent predictable history of the cycles down (about every 20+ trading days), I'm leaning toward the premise of a market surprise to the upside (ESZ09 1120+), followed by a harder correction back to 1050.

The Parabolic Swing & Grind

Yesterday, the 5m chart showed a powerful set of parabolic swing reversals. Trend lines broke easily and needed to be redrawn constantly. This is the nature of parabolic moves. Parabolic moves might imply the bulls and bears have their stops placed close above/below the trendline(s). Once the parabolic move ends, the reversal is just as violent, as the volume dries up in the direction the parabola moved.

There were a few instances of sharp downturn and slowed descent, where the parabola down was slowed potentially by more 'conservative' bulls. But once the cup of support broke, the price easily cut new lows for the day.

Beware, parabolic moves have violent reversals. If yesterday was a fractal of future market events, exercise caution, a big move is brewing. And OpEx week (next week) should be full of thrills and chills as it grinds more nerves to a pulp.

Unemployment, a Surprise?

8:30ET Unemployment Rate for Oct 10.20% Current; 9.90% Consensus; 9.80% Previous

Some say the Unemployment Rate is a trailing indicator, however it needs to improve eventually for the economy to grow.
Yesterday's productivity numbers should encourage businesses to go lean and mean, being more productive with fewer workers. The extension of unemployment benefits recently passed may stimulate Christmas shopping for a few. It is more likely the crippling of consumer credit and the jobless will cancel a Christmas rally, and unemployment figures will go well beyond previous estimates of 11%, due to an increased length of unemployment benefits.

The wall of worry is growing.

Many are pointing to SPX 1066 as a pivot point. This morning's unemployment figure re-enforced that. Looking at my own recent ES chart shows a significant amount of potential support in the 1055-1040 range, which could quickly turn into a bull selloff. Today, it is very probably that ES 1059 will be tested for support or resistance. This morning's selloff on the 5 minute chart is a pretty convincing Elliott wave, which typically lead into a short term consolidation triangle pattern.