First off, if you haven't read yesterday's post, please do. The comments in it are really fantastic. The community we've got going here is just marvelous; thank you!

Second, if you haven't checked out my Alternate Investment Fund survey, please do. This will be the second-to-last time I'll mention it. I'll link to it once more next week, and then I'll shut up about it permanently. This survey is only intended for accredited investors who might have an interest in a fund strictly based on technical analysis, so otherwise you should ignore it.

Third, I've often heard it said that the market likes to prove the most people wrong. I was thinking to myself, what scenario could play out in the weeks ahead that would tick off the most people? I think something like this:

What I've scribbled out above is an S&P which free-falls again to March's lows (plus or minus a little bit). How would the different camps react to this?

• The bears would, of course, be delighted at first, but here's the clincher – – I think the bears have been so battered for the past 7 weeks, that the moment the S&P gets anywhere close to the 780-800 range, they're going to close out everything and engage in a big group hug. 780 is the number everyone is talking about. If the market simply keeps falling, the bears are going to be furious (and feel mighty cheated), since the easy and obvious take-profits point didn't matter much. My point is that the bears will leave almost all the potential profits on the table.
• The bulls would be equally furious, too, because all their easy profits from the past 7 weeks – – – especially from the high-flying momentum stocks – – would go up in smoke. Their relief would come with a double-bottom, but frankly I think newer bulls would feel so betrayed by the market (again) that they would not be as enthusiastic to re-enter.

I find myself engaging more and more in these "what-if" scenarios, since I think it's valuable not to get married to one prospective move but instead massage your mind into being prepared for various eventualities and your corresponding strategy therein.

Well, I'm done with my exam, and wow, it was a tough one. I'll be kind of stunned if I actually manage to pass it. I'll find out in a few weeks, I'm told.

Speaking of stunned, that's how I felt (mildly) when I saw this in today's Barron's, which I've scanned in for you:

I honestly thought it wouldn't be until autumn that we say this kind of public sycophancy. I mean, seriously. "Thank You"? Isn't it just a little premature?

But Sy Harding might be right in this respect – – maybe 2009 will be the bottom of the bear. I've tried to look at the long-term charts with fresh eyes, and I'm starting to question my oft-repeated notion that we're going to claw our way to 1,050 by autumn and then plummet to the 400s on the S&P.

I'm actually thinking there's another strong possibility – – one which I'd love short-term but will like a lot less longer-term, and it is this………….

1. Start softening up very soon, and make our way to just about (or a little below) last month's lows;
2. That would make the low for years to come, but………..
3. We'd be range-bound for many, many, many years

Item (1) is actually pretty close to what I've read Atilla declare a number of times recently. As I look at the long-term (and I'm talking about the entire history, on a daily basis) S&P chart, it occurs to me that the wipe-out we've seen so far has done just about all the damage it can do, and there's only a little more downside left below last month's lows (side note: can you believe that term – "last month's lows" – doesn't the low at 666 seem like it was years ago?)

On the other hand, looking at another major index – the Transports – I can actually see a lot more downside.

The dreadful possibility is that……….after we're done thanking Mr. Obama……….we could be in for basically a market that, year by year, people are less interested in. Take a look at this chart of the S&P 500 from the late 60s, 70s, and early 80s:

Let me put this into perspective. Imagine you trade one stock, and no matter what, the stock never seems to go much lower than $70 or much higher than $100. And imagine that stock behaves that way for twenty-five years. Kind of boring, isn't it? Well, that's what a market like the above would feel like.

So I think the prospect of a new bull market any time soon is not strong. And I think the prospect of a big Great Depression-style plunge is also more remote than I used to. My "preferred count", as it were, is a sooner-than-expected drop toward March's lows, and that'll be the end of the party. This is not wishful thinking on my part. I'd rather have a rock 'em, sock 'em, horrendous bear market that drags on for years. But I'm not so sure that's in the cards. I'll look at more charts this weekend to keep contemplating this.

I'm up bright and early for some last-minute studying/cramming on my CMT test. I just wanted to do a quick comment-cleaner with two remarks.

The first is that I noticed this comment from lashio a couple of posts ago in response to my "bulls are 100% in control" missive:

You are letting your personal bias creep in here. "this market can't be
trusted" by whom? when others said the same thing on way down, ie
"bears are in charge, unprincipled unfundamentally negative etc" that
was just silliness but wisdom now in reverse? bottom line: trend is
your friend until it isn't. your are still trying to pick the top and
just itching for things to go your way so you can make it again on way
down. why bother? you are quick draw mcgraw anyway. wait for the market
to really tell you the reverse. not trying to be smart here as i see a
lot of the sentiment here now as the reverse of my own when things were
going down. i had done real well on way up and hard to break your way
of thinking.

Lashio is absolutely right (and, as I've mentioned before, his avatar is one of the more awesome ones on Slope). One of my CMT books speaks at length about this cognitive bias.

Yes, it's a frustrating market, but blaming it on Goldman Sachs, the PPT, the MMs, or Yosemite Sam, for that matter, is pointless. The market is what it is. If a law is based that says the market will go up 50 points per day until it reaches 20,000, well, I guess we'd better get on board. So thank you, Lashio, for pointing out the error in my disposition.

The second comment I wanted to make is that I noticed the blog that shall not be named seems to have reached a bit of a cracking point as well. I am surprised how quickly a shucking of bearishness has swept the blogosphere and the comments section (to be clear, TBTSNBN isn't bullish, but the tone is about as close as throwing-in-the-towel-for-now that I can remember ever reading). I will leave it to you to decide what all this sudden lack of bearishness means for the market.

For my own self, I assure you, as I look at the big index charts, I simply shake my head and say OTIS. I'll have more to say about my CMT exam is over. I'd better hit the books one last time. (Oh, as one last aside, I'll mention the gent from FinancialCrisisCards.com sent me a deck of this fun playing cards. Check 'em out; they're pretty funny).

I have passed the first two examinations for Chartered Market Technician, and tomorrow is my third and final examination. It is, I'm told, the hardest, and a lot of very smart co-workers have flunked it, so I'm pretty nervous.

I will say one thing about this week's action, and it is expressed in the candlestick chart shown below. If you've ever wondered what an ideal hanging man pattern looks like, you have your example right here in real time.

I'm going to "go dark" until Saturday evening, which means hundreds of comments will accumulate in this content-free post. Sorry about that, but I've really got to hit the books (a photo of my required reading is shown below). This will also give me some time to shake off the insanity of this week and process what's been going on in the market. Thanks.

Well, I think it's pretty evident that bears don't have a chance in this market. Just as the bears completely controlled things back in the marvelous autumn of 2008, the bulls are totally in control now.

Even when the US Government – the most Pollyanna entity of all – states that their view of the economy is grimmer than expected, the dip in the market lasted only a few moments. I am glad that I've sworn off FAZ and SRS. The spike in FAZ last ten – count 'em! – ten minutes. So a whole other slew of traders lost cash on that in a big hurry.

I usually have a variety of "core" positions (six figures), but I have none of those now, since I've really cut my risk down. With the exception of Monday, this week has pretty much stunk up the place. My goal right now is to keep risk low and preserve capital, since this is a market that cannot be trusted for the forseeable future.