Maybe this post should be titled “shattered dreams” instead. Once again, the bears were seduced into a picture-perfect setup and had every bit of evidence to suggest that the market would be grinding its way lower for months, only to have the entire global asset system shocked by a couple of chest paddles. We haven’t had an honest-to-God bear market in almost two decades.
Most index charts look like the S&P 500 below: that is to say, a wedge setup, a rounded top, a failure, and then BLAMMO, the sharpest, most vicious bear-breaking rally in market history. Even at this great distance, the bull run in August looks completely out of place.
