Nothing has changed since our last post Friday.  We have nearly reached 1424.41 — the lower end of the target range established on Oct 31 [see: A New Old Analog.]

If the analog remains on track, today should be the start of a large correction — perhaps in conjunction with the ISM report due out at 10 EST.

I’m shorting here, with stops around 1430.

UPDATE:  10:05 AM

One of the uglier ISM reports we’ve seen in a while. From growing to contracting overall, with every category either contracting or slowing except for production — which (oops) is ramping up as demand contracts.

Looks like the reversal has begun.

UPDATE:  12:00 PM

The reversal has begun in earnest now.  I’ll spend the new hour or so reviewing the downside targets.  First, a little treat appropriate to the day.

I had the great pleasure of seeing the incredible Etta James at the Hollywood Bowl in 2008 and the Monterey Jazz Festival in 2002.  Her voice somehow conveyed both her troubled past and her elation at being on stage, sharing her amazing gifts with an appreciative audience.

continued for members…

First, note that this morning’s ISM report is reminiscent of the one from May 2011, released on June 1, that touched off an 87-point slide in SPX.

Also, note the addition this morning of a new channel — the falling purple channel.  While its placement might seem somewhat arbitrary, it’s exactly parallel to an equivalent channel established by the reversal in June 2011.