That support line was established by the late '05 pullback and the February lows!
That's THREE points as opposed to the TWO that everyone else is using!
And far more ominously, we are sitting right on top of that trendline right now.
This doesn't change the Fib retracement picture and where support is on the downside from here at all. But it does change - dramatically - the odds. A significant further downstroke in the S&P 500 below the current levels, certainly anything below 1400, leaves us with the sinking possibility that we've been modelling this "bull run" off the wrong numbers!
And if so, we are just one more significant weekly decline - another 3-4% - from breaking the Bull's back with conviction.
Now add to this my "Where we've Ben" post from yesterday, and you can see where the risks and rewards lie in the market right now.
Let's temper this technical analysis with fundamentals.
Add all this up and I see a market headed for trouble - but one with risks on both sides.
Therefore, my view is that while I do think we're staring into the maw of a New Bear Market, I am not willing to commit big money to the short side of the broader market until I have confirmation of a new primary trend.
As a noted before, a break above 1520ish on the S&P would cause me to abandon a view that we are staring at a new intermediate-to-long-term trend change. I do not believe, given the macro backdrop, that this is possible. But - you have to go with what the market does, not what you want it to do.
Now individual sector bets and daytrading the futures? That's a different matter. But on the macro level, this is what I see at the present time.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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