Fractal Update: December 21, 2011

I'll be traveling the rest of the week, so posts will be spotty.  Here's a quick overview of the patterns I'm closely watching.  First, the Dec = July fractal we've been watching since Dec 7, seen stacked as well as combined on one chart.

At 1242, we achieved a respectable .618 retrace of the recent decline -- which could be all we get.   But,  in July the retrace was 84%; and we could get as high as 1260 without completing the inverse head & shoulder pattern.  The .786 retrace would be 1253 and the .886 would be 1259.

And, here's the analog that started it all -- 2011=2007/8.  This one first came to my attention in May, although it was early June before I started charting it.  There have been some divergences, for sure, but the similarities are spooky.

The info is the same on each chart -- just different ways of displaying it.  Although I was most interested in the day 150 equivalent, there's a striking similarity between day 162 in 2008 and 160 here in 2011.

If the analog holds, we'd be looking at a 200 point SPX decline (1041) between now and the end of January.  The fractal leads to the same conclusion, with a forecast Crab pattern completion at 983. 

If all this interests you, go back and read the several "Another Fractal" posts since December 7.  Good luck to all.

UPDATE:  10:45 AM

The channel lines are shaping today's action perfectly.  The question is whether we'll add a few points and fill out the white, dashed channel above at 1251-1255.  VIX and DX could both use a little more downside to properly set up their rise, so I'm betting the market rallies just a tad more before the plunge.   But, be careful, we've technically met the requirements (with the .618 touch) for the downside to have started already.

More after the close.