It made sense that we got a bounce today; the bounce could certainly continue into next week. That's fine; I've trimmed back my shorts and took profits; I even made some profitable long day-trades. But it won't take that long for this bounce to end, and when it does……well………let's just say traffic to Slope is going to continue increasing.
Following on the heels of yesterday's bearish trendline breaks on 6 of the 7 Major
Indices, the SPX broke and closed below its uptrend line from the October
2011 lows in today's (Thursday's) price action, as shown on the chart below.
Note that each candle represents three (3) days on this chart.
All seven Major Indices have now broken and closed below this major
uptrend line in what could be a setup for a major move down. Any backtest of and
subsequent failure to break and hold above the respective trendlines would
confirm such a scenario. Of course, we may see continued (and even accelerated)
weakness from here, which could send the related E-mini Futures Indices (YM, ES
& TF) to their respective Head & Shoulders targets of 12400, 1330, and 735, inasmuch
as their necklines have now been broken.
I projected AAPL would get to 710; it got over 700, but not quite to my target. I then projected AAPL would go to $585. It did, and then a lot more. So what's next for AAPL, according to your favorite permabear?
I'd suggest the path before us is below; we've already started out bounce to a little below $580; after that, the wheels come off.
The rising wedge on SPX broke down yesterday, and with that break the possibility of a QE fuelled rally into Xmas has died in my view. We have a very significant downtrend in progress and I'm now considering the possibility that we might be in a new bear market, though none of my usual cyclical topping signals are apparent at the 1474 top.
If we are in a new bear market we will need confirmation of that, and as it happens I have a level and target which should deliver that. First though here is the SPX daily rising wedge that has broken, also showing the close also well below the daily bollinger bands. The overnight action so far isn't encouraging for a bounce today, but I would normally expect the underside of the daily lower bollinger band to be tested on an open below it, and that should be in the 1380-2 SPX area today: