Reminder: we’re in a bear market

Don’t be fooled by current month-end froth in the markets — into thinking that the bear market is over or that the early August plunge was a false signal. The S&P 500 Index has made little headway after completing a double bottom at 1200 despite average volumes indicating the absence of strong selling. 63-Day Momentum peaking below the zero line indicates a primary down-trend. Expect the bear rally to test resistance at 1250/1260 before a retreat to 1100. Breach of 1100 would find support at the 2010 low of 1000, but the calculated target is even lower*.

S&P500 Index

* Target calculation: 1100 – ( 1250 – 1100 ) = 950

The Nasdaq 100 performed better, clearing 2200 to complete a double bottom with a target of 2350*. Bullish divergence on 13-week Twiggs Money Flow indicates buying pressure. But this is a bear rally in the middle of a bear market, and further falls on the Dow/S&P 500 would drag the Nasdaq lower.

Nasdaq100 Index

* Target calculation: 2200 + ( 2200 – 2050 ) = 2350

Fedex and UPS remain in a primary down-trend, indicating that economic activity levels remain poor.

Fedex and UPS

7 Replies to “Reminder: we’re in a bear market”

  1. Your S&P Chart indicates a uptrend with a higher low. I believe we are headed back to 1341. I would not rule out a return to 1123 before we advance to 1341.

  2. I really like your trading diary posts, they also help me stay on an even keel in these confusing times.

    I note that the TMF on the daily paints a more grim picture, supporting your warnings using the weekly tmf.

    I looked at the 13 period TMF on spy and iwm daily charts. They both are below zero, and have back tested zero recently before declining southward. This to me is a very negative omen.

    thanks again

  3. Gday Colin – Thanks for your diary.

    I agree with post number 3 with regards to S&P, having made a low on 9 August since then we have seen 2 higher lows and a higher high so hasn’t the trend turned?

  4. Two bell-weather indicators often used are the share price of UPS and FedEx I don’t know the relative regional market share but why not add DHL for a picture of EU / Asia?

Comments are closed.