Lest there be any doubt about whether we’ve been in a bear market since January, this morning’s action should disabuse those of that notion. Especially the boobs waiting for a CNBC declared bear market on the basis of a 20% decline.
Whether or not something is in a bear market has nothing to do with percentages. It’s about trend and time. This is now the second time the 24 hour S&P 500 futures have made a lower low after a lower high. The bull market peaked on December 27 of 2021, and has been in a downtrend ever since.
It’s a bear market. Long term momentum indicators began signaling that shortly after the top was in. But the mainstream media adheres to this insane “rule,” from whence no one knows where it came, that only a market that’s down 20% is a bear market.
Charles Dow, Hamilton and Rhea are rolling over in their graves.
But here and now is all we’re interested in, in this thread. And the 5 day cycle projection of 3865-75 has been hit. The hourly futures exceeded their prior low by 0.01. That’s usually a signal to the dealers that this is the low, but expect lower lows later. So I’ll go with that for now. 4
As of 6 AM in New York, I’ll guess that the market will rally from here. If it doesn’t, then the immediate target would be 3800-3810. If it does rally, then it needs to clear 3875 by 8 AM. Failing that, we’d still be in crash helmet mode. If they clear it, then the target would be 3930-50 in the opening hour in NY. A battle there would signal whether we get more upside later, or a resumption of the crash.
For the big picture:
- Gold Miners Make Short Term Bottom, But Wait, There’s More! May 17, 2022
- Buys Beat Shorts Again in This Week’s Swing Trade Screens May 16, 2022
- Market Rebound Still Leaves Crash Risk Intact May 16, 2022
- Dealer Positions Show It’s Not Getting Better and It Should Get Worse May 15, 2022
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