http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p18894193176&a=214966864

As we have previously noted, the forrmation from early September to late October has a toppy aspect.   We measured the depth and came up with 77 points, subtracted from the bottom, 1397, gives us a potential target of 1320.  We have marked it on the chart.

This is a weird wave.  We think there may be several sources of anxiety — the fiscal pothole (only if you have a political horse in the race is it a cliff); European angst;  fear of turkeys (proximity to Thanksgiving); and tax phobia.  The last may be the best villain.  George Lucas just sold Lucas Film to –gasp– Disney.  There can only be one reason, given his detestation of Hollywood:  taxes.  Get it done before year end and beat the tax raise that is inevitable.  Readers might think about this for their own portfolios.  We are not accountants so can’t opine on wash-sale rules (call your own accountant).  There are so many instruments  out there you ought to be able to reap your profits and  not destroy your positions and still avoid the wash-sale rules.

Of great importance this time of year:  Thanksgiving

We habitually make a donation to the local food bank at Thanksgiving.  So should you. Our URL is sffoodbank.org.  A quick google will find your local foodbank.  Contributing is good for the soul; good for your karma and good for the hungry.