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Happy Thanksgiving week to all of you. We've got the indexes behaving nicely so far today with most all of your major bullish ETFs gapping higher on the open this morning. It's no doubt a welcomed change from the consistent pummeling the indexes have been receiving for the last couple of months now, however, in the best interest of objectivity, there's no need to necessarily run out and get overly excited at this point. Yes, we got a nice intraday wash and rinse on Friday, which was just what we've been looking for, and just like we also mentioned Friday, we're seeing some excellent follow through to kick off the new week here today, but it's important to remember a couple of key points.

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Good Friday all. It's been a dismal week for the markets but maybe, just maybe, we're starting to see signs of life. Rather than continuing to try and catch a falling knife though, we patiently await a reversal signal from the major indexes to suggest the markets have decided to stop bleeding, at least for a while. As I type, all of the major indexes have erased their early losses this morning, so it will be interesting to see if we can get the necessary follow through that stocks have been desperately seeking for weeks now. Our suggested oil trade appears to be doing just fine with the price of light sweet crude up a couple of bucks from our suggested entry yesterday. However, one day does not make for a successful trade, not in our book anyway.

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Good Friday all. We've got a real market mess on our hands, eh? I can't remember the last time we had such a divergence in the markets with respect to economic data, corporate earnings, uncertainty surrounding Fed policy and global economic visibility. It's the theory of entropy. Chaos at its best. What a freaking disaster. It appears we've got all of the above going in ten different directions. All while the markets continue to hunt for some semblance of a bottom. This morning, the headlines were consumer sentiment rose to its highest levels in five years and wholesale inventories rose to their highest levels in nine months - such rosy data. The markets could care less. That's living proof the markets trade based on what's going to happen and not what has happened. In other words, the indexes have already previously rewarded today's lagging economic data, months ago.

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We made it pretty clear yesterday that we needed to keep a close eye on how the markets react to yesterday's selloff. So far this morning, we're hardly seeing signs of the type of snapback we need in order to confirm the markets are hunting for a bottom around current levels. No harm no foul as of yet, but we've still got the rest of today, tomorrow, and early next week. On the open this morning, the indexes mustered up a little buying strength but it was negated in short order with most of the major indexes sitting flat on the day as I type. We're seeing all kinds of whacky commentary coming out of the media as they try to magnify the uncertainty surrounding the fiscal cliff now that the elections are over. I even saw one article suggesting Apple's (AAPL) recent selloff is due to the Company's concerns over the possibility of tax hikes being a part of the fiscal cliff reform. Really? In my opinion, if we're going to be concerned about tax hikes, that's fine, but don't blame Apple's recent selloff on something as stupid as that. I'll get to Apple in a bit here.

First, since the importance of identifying a bottom right now should be front and center, we thought we'd point your attention this morning to what happened in early June when the indexes nicely washed out the weak hands, only to move higher for the next four months. I've included a daily chart of the NDX here isolating that time period in early June when the indexes hit bottom after a pretty fierce two month selloff. As you can see, the downward move preceding the reversal was parabolic and volatility was extreme, which is why we continue to look for that same behavior right now as a potential clue for a reversal. You can see toward the very beginning of the chart, the NDX move sharply lower and reversed course all within a day and a half to erase the previous day's losses. That was the first signal, which was hopeful. Then, the second move (a modest pullback) was good to see but it was the third move that failed.

In the best interest of Elliot Waves, we'll label the first big snapback day as A, the modest pullback B, and the third attempt to move higher C. A was good, B was logical, but C should have been a sharp move higher after the modest pullback, but what actually ended up happening was C was only a very short lived move to the upside, which sent the markets into another strong leg down and that's where the NDX finally found its bottom. For your technical prowess, that C move needed to have at least more than a single day of buying strength to suggest strong follow through, and it didn't.

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Well here we are... Election Day 2012, arguably the most important election in modern day history. Many of you are probably expecting a rant of sorts for today's edition, but we here at SmallCap Network have drawn our individual lines in the sand and no matter what happens, we're going to wake up tomorrow, keep working, and just keep on keeping on. Depending on who you talk to here, you are likely to get a different opinion, and that sure does appear to be the theme of the day no matter who you talk to. It's possible that by late tonight we'll know who our leader will be for the next four years, however, there's also a decent probability we won't know for a couple of weeks. Wouldn't that be anti-climactic? Whatever happens, it is what it is.