FWIW

I think there is a good possibility that we may have bottomed.  Reason- the financials testing 2009 lows and most of the rest of the market testing 2010 lows.  On the other hand, I cannot see a lot of upside potential in this environment. Therefore, I am  not willing to put my 3 month money (money that I am unable to move as I wish) anywhere except cash.   We still need clarity and it's not there.  In the mean time, with money I can easily manipulate, I am playing heavily in the direction that the market is moving.  When it changes so will I.

ATR is something that I expect to see increase in a volatile bear market.  Take a look at the size of the last bullish engulfing candlestick- in relation to the last many years.  I could give you values for the ATR but you can do it visually just as well.  What does it mean?  I don't know for sure except that bull markets are usually much more orderly and bear markets are not.  

SPY Monthly

So be careful on the short term

opposing forces that are affecting the market right now.  On the one side we have overburdening debt coupled with aging and entitled populations, and on the other we have crooks, politicians and governments doing everything possible to try to keep the population happy or at least delay the problem long enough that it hopefully becomes less of a problem. (If that's even possible.)

So how do we deal with it as traders?  Well, it may well turn out that your thinking is absolutely correct about the long term.  

Since I frequently find myself in a similar dilemma,  I have a note taped right to my laptop.  It says "Think big picture but trade the small one". 

That keeps me focused where I need to be.

It could, but since the indicators are driven by price, it could just as easily go back down and we all want to know the answer to that one.

I played most of the trend up but I'm flat until I see how we handle this resistance.  

The thing that strikes me is that your CCI  appears to be slowed way down.  So you've got it in trending mode kind of like a slow 60 stochastic.  Now that's OK if that's what you're looking for but it will just move a whole lot slower compared to price.   Is that what you were trying to figure out?  I think the standard CCI is 20.

Using MS as an example but others are similar.  Nice support area from '09 limiting your downside but also keep in mind that I don't believe we are near financial armegeddon.  Maybe we are.  MS looks to be in a  nice bottoming pattern. It could pull back a little and form an inverse H&S or pop through resistance here.  Short term targets downtrend line that touches price somewhere between 18 and 20.  Might end up being nice longer term trade if things play out right.  In my  mind the downside appears priced in already.  But, it all depends on the market.....DYD Diligence.

We are struggling at the top of this big trading range and fighting very strong resistance.  And no, 1230 is not a safe place  to say it's over.  It helps but it's not there yet.

Looks like we may want to head toward the 200MA.  We'll see

I'll take some of that.

to hold a strong bias or at least to tie your money to that bias on anything longer than a trading basis.  It's either early in a longer bear or possibly near the end of an ugly correction.  I can sit here and make some pretty good cases why we should go down, up, or even sideways for a period of time.  The truth is that our long term charts tell us this has a high probability of being a longer term bear market.  It doesn't make it so, it just increases the probability.  It could  still end up being just an ugly correction.  We won't know which it is for a while.  

If you have long term money riding one direction or another then you should have a stop where you realize that you are wrong and need to get out.  You should know where that point is.  Otherwise cash is safe until the picture clears.

Personally, I think the risks are too high for a long term bias in either direction.  But, my risk profile is designed to keep what I have and make money when I can.  Your's may be different.

Read it when you have the time to absorb it.

http://pring.com/assets/pdfs/lostdecade.pdf

Looks to be moving toward a 4.

The 60 Minute GET count shows us at a wave 4 of some kind, possibly even beginning 5 up.  The wave 4 jives with the oscillator so that's good.  Keep in mind that 4's take on all kinds of shapes so it may not be completed, but it appears to have at least met the minimum requirements.

Of course, now somehow you have to apply that to the daily and the trading range. Good luck with that.