This is getting verrrry interesting.



That would be the SPX in the sphincter. It has fallen out of the channel, got just back into it yesterday, and now is out to the bottom today.

Now look at this, our friend the Dow



The Dow popped the channel to the upside yesterday, attempted to pull back today inside of it, failed at the top line and closed above!

And finally, our friend the Nasdaq:



Which today continued establishing a downtrend channel. (The Russell, by the way, came along for that ride)

The SELLs on both the Russell and Nasdaq continue to be posted, and in fact the MACD continues to deteriorate for both. The SPX is at Decision Day - literally - tomorrow.

And the Dow appears to be breaking out to the top.

What is someone supposed to make of this? "Primary uptrend intact"? Uhhhhhhh no.

Today we had further evidence of the economy deteriorating. The LEIs were down, making it now six straight months that they have declined on a composite basis. You didn't hear that reported very loudly, did you? Yet this, when coupled with an inverted yield curve, are two of the most reliable recession indicators available!

Now let's add a few more things. New highs and lows on the Nasdaq continue to be in the danger zone, both over 75. This is a solid indication of a major top, and it continues today as it did yesterday.

On the NYSE, we had 202/46 on new highs/lows, a big increase in new lows over yesterday, but not in the "major market top" range (both north of 70-75 meeting that criteria)

Capital flows on the indices were dislocated from the advance/decline line. The Dow posted almost a 2:1 decline on capital flows, while the S&P showed actual capital flows on the advance side were higher, while the A/D line was 9:15! The Russell 2000 was almost 2:5 on the A/D line yet capital flows were flat. This indicator is therefore flat.

One final thing - the 10 year Bond rose in yield to 4.76%, a full five ticks higher than yesterday, continuing to reinforce the market's view that real interest rates are going higher, not lower.

So as I see this is what we've got as of today:

• All three primary indices took a run at higher territory today and failed.
• Credit costs are going up, not down. If your bullish and your thesis requires falling interest rates, you're screwed and need to rethink your premise, as it appears that's simply not going to happen.
• The Nasdaq and Russell continued to establish a downward channel, and the S&P is now out of room. Therefore we are now at "Decision Time", and tomorrow may well be the day, simply because the S&P is out of room - and a thesis that 30 stocks can levitate 500 is a fanciful field of dreams.

Tomorrow, being option expiration, is only going to make this more interesting. I would not be surprised to see a 300-point swing on the DOW, although its by no means a certainty which way this goes.

If we get a break above on the S&P, then at least for that index I'm inclined to play the long side on both it and the DOW for now - but with a 2% trailing stop. The profitable trade I've had in QIDs will have its stop tightened up and if the market takes me out, so be it.

On the other hand if the break comes tomorrow for the S&P I'm adding SDS and even more QIDs.