I've always wanted to do a post whose timestamp matches an old Simon & Garfunkel album, so here we go:

Looking at the /ES at this ungodly hour, I'm glad I took my little 3 point profit Tuesday evening. We are well into the "mush zone" right now (in yellow) where meandering can be expected. I've tinted the target level in green. We'll see what the world looks like when we get there.

I will point this out, though. Even though we didn't know it, the bullish assault ended on June 5th (marked as 1). It made another attempt, but failed (marked 2). And it made another attempt, but failed again (3). And, since then, we've been in a soft, steady slide (which makes for trading so easy and profitable it brings a tear to my eye).

It's nice to get a respite, but let's see if the bulls try to wrest control again, now that we've eased 50 points off the highs!

First off, I want to express my continued thanks to CHES; I haven't seen you-know-who in the comments section in ages. Thank you, guys! Thank you!

Second, I guess the bulls that took the easy ride up during the past three months are confused about the past couple of days. Isn't the market supposed to go up 50% every twelve weeks? I don't think this is the beginning of the "Big Kahuna" fall (Lord, I hope not; I've got big plans for this autumn, and I'd prefer the market burst into flames around then!), but – as I'm repeating ad nausem – I do think S&P 880 is in the cards.

The EUR/USD is every bit as important as I felt it would be; there's still ample downside from here.

I imagine the continued strength of the dollar would break a number of otherwise attractive commodity patterns, but I'm keeping my eye on them just in case.

I have some pretty big short positions in gold, but tomorrow is pretty key. If the $HUI broken today's low, that would make it much easier for the tumble to accelerate. Notice – as with the NASDAQ – the $HUI has come full circle to its breakout level.

The Morgan Stanley Technology Index looks very vulnerable; I even bought a mid-sized TYP position today, since this is about the most bearish index chart I'm following. Oh, and don't think I'm showing the "tint" in any of my charts as a projection. I usually use it to show areas of weak support. I, errr, overdid it on the chart below.

As I mentioned, the NASDAQ has come full circle. It's very close to closing that gap; if it sinks even further, more meaningful weakness (e.g. S&P=880) would quickly follow.

I've also noted with interest that the $TRAN keeps getting repelled. Three times, it has been kicked away (see arrows). The present weakness across the board in equities tells me that the bear market rally has really run out of steam; further attempts at new highs will be difficult and may perhaps not even materialize.

One last thought – – I've been saying since Obama won in November that his Messiah-like popularity is heading for trouble. He's still seen as the savior of the world (or at least the United States), but some of his supporters are starting to have bits of doubt here and there. I noticed on Reddit – which tends to attractive a pretty consistent wildly-pro-Obama crowd, is starting to have posts now and then which question just how perfect Obama might be. I think, ultimately, as we zoom toward 5,000 and below on the Dow, you'll see this kind of doubt explode into full-blown disillusionment.