12-2-2011

Believe that the trend has turned up and for those that follow EW this is probably P3 UP....for those that have read my posts over the last several months, you know that I have traded this market on both sides.  For the record, since August 30th (I took control of my account in recent months) I am up a bit over 16% and ahead of the market by about 11%-12% over that time period.  Trading both sides of it.  I don't care about fundamentals and I don't care about opinions.  I care about the charts.  And they are suggesting higher prices after a short pullback.  Everyone wants to talk about the fundamentals and Europe but you can make the argument that Europe and the US will end up PRINTING, PRINTING and PRINTING more.  As a result, debt gets inflated away and profits and assets rise.  Not as much in REAL terms as currencies will be falling relative to others.  Nonetheless, in nominal terms there might be money to be made staying long.  I only present that scenario because for every bear case, there is a bull case.  I would rather follow the charts.

S&P 500 Bullish Readings:

39,1 Slow Stoch is back over 80

Above middle of Monthly BB

Above middle of Weekly BB

Monthly RSI at 53+

Weekly RSI over 50

Bullish Engulfing Monthly Candle

Bullish Engulfing Weekly Candle

VIX is elevated after two major spike, path likely: lower

*There are more I think but these are the ones that I can think of off the top of my head

S&P 500 Bearish Readings: notice they are all lagging indicators and the last to follow the above indicators

Monthly MACD still negative divergence

Weekly MACD still under 0 line

Still below H&S neckline 

Still below 200 day, 39 week and 10 month sma

Still inside the weekly Ichimoku cloud

*I believe the bearish indicators are lagging because trendlines and moving averages are by definition lagging indicators.  So, they are likely the last to fall.

***Went from 100% long to 50% long at the close.  Looking for 1220-1225 to get back long and stay long, probably up to the 130501320 area depending on when (if) we get there.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=3&mn=1&dy=0&id=p16072032591&a=248174651&r=942&cmd=print

http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=3&mn=1&dy=0&id=p64880601586&a=237866927&r=8014&cmd=print

http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=2&mn=11&dy=0&id=p45349256753&a=240578399&r=7422&cmd=print

11-14-11

I marked the chart below to show the bearish divergence that seems to be developing.  Further, I marked (black rectangle) where I believe the last push is likely to take the market as the bearish divergence occurs and creates a sell signal.  It is only an area to pay attention to and is not necessarily a forecast as I have said time and again, that one should not invest based what they believe is likely to happen.  It is just something to keep an eye on.

Notice MACD at 24.33 at the 1292 high.  Today it sits at around 14.  Maybe we won't make a higher high.  Maybe we will blast off to much higher highs and much higher MACD levels.  But just in case we make a higher high and MACD is still below 24.33 it will be nice to be prepared.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p17514767334&a=243753337&r=1152&cmd=print

11-11-11

Ok, so I did a stupid thing.  Something I said I wouldn't do again.  I took 44% off yesterday at the close and remained only 56% long.  Dumb, especially in light of my ranting about making a slightly higher high.  Do as I say, not as I do would be appropriate.  Ok, now that I got that out of my system, let me make this one observation.  In May 2008, after a 2 month rally from a lower low (just as we are in the middle of) the market made a bearish divergence as the last push up marked the top.  From a time frame perspective, that would take us into early December but let's put that aside for now.  The recent two sell offs have provided investors the opportunity to put that scenario on the table as MACD has been damaged enough so, that if the market was to chop to a slightly higher high (say, 1305ish 78.6% Fib level) it would still be lower than when the market last touched 1292.  If daily MACD then crossed back over (negative) that will be the bearish divergence that an investors looking to get short would be dreaming of as it would match up with the scenario in May 2008 when the market topped.  The two charts are below.  Take a close look at MACD on both to better understand the point I am trying to make.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p83737992130&a=243753337&r=2839&cmd=print

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2008-03-03&en=2008-06-02&id=p57933942160&a=248174651&r=2522&cmd=print

11-9-2011

So, all the bears are back out again calling for a top.  Let's all take a step back and take this for what it is.  Italy's bond yields are blowing out but they have been doing that for a week.  We've all been talking about it.  It is not like that is new news.  One has to understand that the market has moved basically in one direction for the last month and corrections are normal.  If one is also to look at March 08- May 08, as I continue to reference, there were several sharpish corrections but they were followed by higher highs.  The final high in March formed a bearish divergence on MACD.  The market made a higher high but MACD made a lower high.  This is one of two set up that would be worth watching for.  If the market is not to make a higher high then one should at least look for RSI to make a higher high as the market makes a lower high.  That would be quite bearish as the market would be more overbought on RSI but price does not confirm.  Lastly, when the market touches or breaks through the Bollinger Band for the first time, it will often correct to the middle of the Bollinger Band and then retest the top of it again.  At 1292, we touched it.  The market has since corrected toward the middle.  A push back toward the top would be normal and a better signal if confirmed by a divergence when retesting. None of the above has happened yet, so I would keep a cool head here and take this for what it is....A CORRECTION.

One last note, the DJIA is also below and the 50 day ema and 200 day ema are both in the area of the 50% retrace.  For SPX that level is 1222.  That is where I will consider getting longer.  All three in the same area makes for a powerful support level.


2008 as a reference
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2008-03-03&en=2008-06-02&id=p57933942160&a=248174651&r=6447&cmd=print

Today (ignore all the lines and just focus not he the market pattern, oscillators and Bollinger Band)
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=8&dy=0&id=p98792950605&a=243753337&r=1710&cmd=print

DJIA
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=11&dy=0&id=p79409412437&a=241463348&r=8637&cmd=print

11-7-2011 (Pivot Points can matter too)

Thought this might be of interest.  I would never buy or sell based on Pivot Points but it can make a signal much more powerful as an added tool.  Just as 1074 was near the 1080 and 1090 weekly Pivots (Standard and Fib), the chart below shows how right at the upward sloping neckline, the Standard and Fib Pivot Points, intersected making for a more powerful short signal when the market jumped on the Greek bailout news.  Just wanted to share some addition support and resistance levels that can at times make for a more robust signal and give an investor more confidence in building a strong position.

http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=1&mn=0&dy=0&id=p03712478434&a=248234491&r=2354&cmd=print

11-7-2011

Playbook:

The DJIA seems to be the better guide thus far.  It is finding support and resistance at the 50 day ema and 200 day ema while also coinciding with Fib levels.  The chart below shows how terrific this index has been for technicians.  MFI recently traded above 80 which is not an everyday event for this index.  With that said, MFI getting overbought is often a prelude to another push back toward those overbought levels (from an index price standpoint) but with MFI being less overbought.  Sometimes the market will actually make a higher high and sometimes it will just get close.  The chart below shows what might be an interesting scenario.  Around Thanksgiving, the upward sloping neckline crosses what is perceived to be an important area of resistance (red horizontal line).  12347 also happens to be the 78.6% Fib retrace level.  If in fact the market does test that area, whether it be late Nov. or early Dec. while MFI is still lower than the recent overbought level, it will make for a possible top.  Also, keep an eye on MACD which if lower at that that point in time will be added confirmation.  Of course, a lot can happen between now and then and I will never invest based on a forecast that has yet to be confirmed.  It is just something to keep and eye on.  That is why the blog is called, Trust but Verify.  Trust the charts but verify with indicators.  One needs both in order to be a successful technical investor.

http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=11&dy=0&id=p79409412437&a=241463348&r=7713&cmd=print

11-6-2011

Please let me know if you would like me to continue posting.  I had stopped posting as I was unaware of how many page views there have been.  I had assumed that if there was interest in my point of view on the markets that a follower might join the thread and enjoy some conversation.  That has not been the case.  My hope is that any of you that are interested might post some comments and charts of your own as I have been a beneficiary of others observations.  For example, the FXE chart and the charts of FTSE, DAX and CAC were posted by someone else on another blog.  I went to StockCharts and created my own and, WOW, it gave me more confidence to short the market heavily at the 1285 close.   All of my charts are at the bottom of this post.

Let me share one quick point about how I use technicals.  I do not use EW and I do not make it overly complicated.  I think too many investors use too many tools and as a result there will always be one that says to go long and one that says go short.  Then, whatever the investors point of view is, they can justify doing either.  That leads to investment mistakes I prefer to stay away from.

So, I use MFI, RSI, MACD, Bollinger Bands, Fib Fans, Fib Levels and Chart Formations as compliments to each other.  They either mostly agree or disagree and by sticking to them I can never justify a personal preference.  Rather those oscillators and tools direct my decisions.

So, where I would like to pick up is with a quick recap of how I have observed these markets from the 1370 top. I have a huge believer that meaningful market tops and bottoms are made when on a WEEKLY chart, RSI, MFI and/or MACD make a bullish or bearish divergence.  Since the 667 low, there have only been TWO WEEKLY bearish divergences.  1219 last summer and 1370 this April/May.  That makes for a pretty powerful track record since the only two large sell offs since the market bottom came last summer and this summer.  Now, once that happens, a buy signal would ideally occur if on a WEEKLY basis RSI, MFI and/or MACD form a bullish divergence.  The problem is that bottoms can often occur much more quickly and violently than market tops which often take time to form.  With that said, it is best to keep an eye on Daily divergences to make sure one doesn't miss a big market bottom.  In the case of 1074, you not only had 2 weekly pivot points (standard and Fib) at 1080 and 1090, but the bottom of the WEEKLY Bollinger Band was at 1071.  RSI and MFI made a WEEKLY divergence while RSI, MFI and MACD ALL made daily bullish divergences.  That is one powerful buy signal and it was the reason I went 125% long at the bottom.  I couldn't understand the calls for much lower lows or for the 1050 area so many were pointing to, but owe well, that's what makes a market.

Where are we now?  Well, this is the hardest and easiest part of the cycle to work with.  It is the easiest because one should already be long the market since the 1074 lows so if the market reverses lower, you should already be way ahead of the game.  It is the most difficult because the only sell indicators one is likely to receive is a daily bearish divergence if the market can make a slightly higher high.  It would be most powerful if it happens near the neckline as drawn on the charts below.  And lastly, if it happens near 1305 (the last of the FIB levels), near a meaningful bollinger band mark and with the market being overbought then I will be willing to exit the market and possibly even go short.  That is what I will be looking for.

In the meantime, the charts below are the ones I look at on a daily basis to make my investment decisions.  I hope you find them helpful.

The SPX chart looks like there is A LOT going on but it is not as much as one might think.  the DJIA chart, which is the first chart is actually the best to look at for technical purposes.  It has been a technicians dream and I am starting to believe that is the better chart and index to reference.

DJIA 

http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=8&dy=0&id=p94825989499&a=241463348&r=8567&cmd=print

SPX Weekly

http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=1&mn=0&dy=0&id=p57827954915&a=237866927&r=6652&cmd=print

SPX Monthly

http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=1&mn=0&dy=0&id=p12467341497&a=240578399&r=9262&cmd=print

SPX DAILY (ZOOMED in for my benefit)

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=8&dy=0&id=p98792950605&a=243753337&r=7681&cmd=print

Russell 2000

http://stockcharts.com/h-sc/ui?s=$RUT&p=D&yr=0&mn=11&dy=0&id=p68697548918&a=241071111&r=9470&cmd=print

EURO

http://stockcharts.com/h-sc/ui?s=FXE&p=D&yr=1&mn=9&dy=0&id=p01809840892&a=247460028&r=5379&cmd=print

FTSE

http://stockcharts.com/h-sc/ui?s=$FTSE&p=D&yr=0&mn=8&dy=0&id=p79675255283&a=247462556&r=2573&cmd=print

October 6th

Closed out my 75% long and went 40% short at the close.  Hoping for a one day pull back enough so that it makes the trade worth it and then go long again until we test the 50 day.  If we go straight to the 50 day then I will go further short and average up.  Then risk off for a short pull back and then long again into December where I will continue to look for 1220-1250 (1230/35 being my target).  The 30 minute chart shows MACD is about to cross despite closing on the highs so I thought it was a shot.  Also, 1165 is the 23.6% retrace from 1370-1101 which makes for a logical short term pull back. 1187 is the 38.2% retrace if drawing to the 1074 low, so that is a fair target to consider as well if this market pops further from here. 


Weekly RSI and MFI have made bullish weekly divergences and RSI, MFI and MACD have all made  bullish daily divergences.  It's the weekly divergences that suggest the lows for the year are in.  Although, I still believe next year the US will fall into a recession and face much lower lows.  The 30 minute, daily and weekly charts are below.

http://stockcharts.com/h-sc/ui?s=$SPX&p=30&yr=0&mn=3&dy=0&id=p73344263983&listNum=1&a=245472896

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=7&dy=0&id=p14762534248&a=243753337&listNum=1

http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=0&mn=9&dy=0&id=p83217381620&a=237866927&listNum=1

October 5th

Full disclosure...went 50% long Monday at the close.  125% long at yesterdays close.  Took 50% off today at the close (a bit too soon I think) but am still 75% long.

The charts below make an unreal case for taking longs off at 1160-1165 and at the 50 day ema/sma and even shorting for a pull back before another possible move up to eventually try and test the 200 day.  The first chart is the 60 minute chart.  The second is a daily chart.  The trend lines and Fib levels all come together in the same 1160-1165 area and with the 50 dam ema and sma at 1190 and 1183 you can see them coming down and possibly meeting in the area as well making it an even better shorting opportunity (or at the very least a chance to take off long positions).

The third chart is the early 2008 lower low.  Today's market looks the same.  In 2008 you will see the market first tested the 23.6% Fib retrace, had a small pull back and then challenged the 50 day only to pull back again.  Today's market looks to be setting up a similar pattern

http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=3&dy=0&id=p06754384142&listNum=1&a=244530375 (60 Minute)

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=7&dy=0&id=p30285842435&a=243753337&listNum=1  (Daily)

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2007-06-04&en=2008-06-23&id=p88951979887&a=244348898&listNum=1 (2008)

Oct. 4th

Today was no shocker.  Man, if only I could trade etfs.  Oh well, I went from 50% long to 125% long as of today's close.  I hear a lot of numbers being thrown out there in terms of next level of resistance.  I will say it again and keep saying it until I am blue in the face, while you might get a small pullback at any given point in time, the more likely meaningful pullback will be we sentiment is extreme, and price meets a moving average and/or a Fibonacci level (ideally all at the same time).  Today the 50 day ema is 1192 and the 50 day sma is 1187.  It seems reasonable to keep an eye on a move toward the 1160-1165 area (23.6%) retrace level.  It would be particularly powerful if the market meets a Fibonacci level and the 50 day moving average in that same area.  Looking for the 50 day to take part or all of my long position off.

October 3rd

Well, no shocker here.  History suggests that big sell offs are ultimately followed by a lower low.  We got that today.  I know many are looking for 1018 (50% Fib Retrace) but I just don't think we are going to get there.  1080-1090 Pivots seems like reasonable support but 1055-1062 Pivots would make more sense if a capitulation bottom occurs. I can only trade mutual funds so I don't have the luxury of catching a capitulation bottom, so I went 25% double long today (50%) with 75% cash to deploy at lower levels.

Bottom of weekly Bollinger Band is at 1071 which would make sense as a reasonable short term low.  Often, the market trades through it on the first move down (as it did in July and August) and then touches it the second time (then rallies).  Notice the third link below and you will see that the market in March of 2008 touched the bottom of the BB after first breaking through it.  Then it rallied meaningfully higher.

Also, RSI, MFI and MACD are all forming possible bullish divergences, while RSI and MFI are forming possible WEEKLY divergences.  That would suggest a bounce that might last for a couple of months rather than a couple of days or weeks.

Daily
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=7&dy=0&id=p54280484771&a=243753337&listNum=1

Weekly
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=1&mn=0&dy=0&id=p21520836351&a=243023935&listNum=1

2008 Weekly with Bollinger Band
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&st=2007-06-04&en=2008-06-23&id=p06564419474&listNum=1&a=245202441

October 2nd

I've been posting on other blogs for sometime now and just figured that since I end up having some very nice conversations back and forth with other investors that I might be able to do it in one spot from time to time.  That is the reason for this site.  It is not intended to take away from anyone else ideas or hard work, rather share my own point of view and to also benefit from other investors' insights.

As many of you might already know, I am a strong supporter of using RSI, MFI, and MACD but in using them together as they seem to be the most reliable and complimentary that I have found.  I also like to use Fib Fans for longer term trends, Fib Retrace levels and moving averages as support and resistance, but again, together and as compliments.  Sentiment is also a must as most bottoms and tops (short and long term) are made when sentiment is near extreme levels.  And lastly, a chart formation (like a Bear Flag) makes for a more powerful signal.

So let's just recap what has currently taken place in the markets.  The first link below is a daily chart with a Fib Fan drawn from last years lows (the three white ascending lines).  As you can tell the 61.8% level was officially breached in August and has acted as resistance ever since.  Also, there are three Fib Retrace Levels drawn.  Why?  Because I see, too often, investors try and use levels based on two points when the market might in fact surprise us all and find support or resistance given a difference high and low.  So, I like to "cluster" my Fib levels and they have worked out terrifically.  The 38.2% level (1195-1204) has been resistance several times now but notice how the 1204 level was resistance the first time, but recently 1195 acted as resistance.  The cluster worked great and if you were willing to start putting shorts on at the beginning of the cluster you would not have missed out on this most recent sell off.

Moving Averages....If an investor can find an important Fib Level and moving average to meet at a particular point, they probably have a pretty powerful signal.  That is what happened recently.  It seems that with most bear markets there is a rally and a test of the 50 day.  Again, I don't presume to know what works best so I use both the 50 day ema and sma (kind of a MA cluster).  We saw the market make a move to the 50 day at 1220 (close to the 1224 Fib level) only to pull back.  At 1195 the 50 day was near 1204.  Starting to build shorts would have been a prudent move.  What sent such a strong signal the day the market reversed at 1195 was that the market closed below the bear flag up trend line.  It was a clear indication that the pattern had held.

The second link below is a weekly chart.  The most important in identifying when a meaningful top is forming because it is a weekly chart.  MACD, MFI and RSI usually make bearish divergences and bullish divergences at meaningful bottoms on a weekly basis.  It is nearly always the case at market tops but only mostly the case at market bottoms.  Why?  Market bottoms sometimes happen very quickly and violently so the weekly chart doesn't have time to adjust.  EG.  Last year.  No bullish divergence on a weekly basis but on a daily basis all three indicators formed bullish divergences at the 1010 low.

So, what now?  Well, the weekly and daily pivot points are all sitting in the same area (1087 daily S2 Pivot) and 1080 (Weekly Fib Pivot) and 1090 (Weekly Standard Pivot).  If we also include the VIX at around 42 and bullish divergences forming on all three indicators on a daily basis and two of the three on a weekly basis, I think there is an argument to be made for a bottom (short term) to be made in the 1080-1090ish area.  The fact that sentiment is so negative and bullish divergences are popping up all over the place, I think those Pivots might end up being a reasonable area to find support.

From there, if 2008 is any indication, watch for a rally to the 50 day (ema and/or sma) to provide a slight pull back and then a move back into the 1220-1260 are (likely 50% Fib retrace if I had to guess).  What will be key is, "where is the 200 day SMA"?  I happen to think that like May of 2008, the market will slam into the 200 day sma while also being near a major Fib retrace.  If resistance holds at the point, there might be a big big shorting opportunity.

All of this is forecasting because it is good to keep an eye on possibilities, but let me be clear: I invest based on the data that is actually available at that moment in time.  Not based on what may or may not happen.

To close, I included a chart of early 2008 so you can see the amazing similarity between then and today.  Most people are focusing on late 08 when early/mid 08 is the clear chart to keep an eye on.

I look forward to thoughts, comments and insights that I can benefit from and hopefully may other readers that join the conversation over time.

DAILY
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=7&dy=0&id=p32771745761&a=243753337&listNum=1

WEEKLY
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=0&mn=9&dy=0&id=p83217381620&listNum=1&a=237866927

2008
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2007-06-04&en=2008-06-23&id=p88951979887&a=244348898&listNum=1

Deja Vu....

Ok, I had to post this since it seems nearly every comparison I have seen of the current time period is missing the MOST OBVIOUS of them all.  The first chart is the recent 3 months.

http://stockcharts.com/h-sc/ui...

The chart below is EARLY 2008. The chart is nearly identical and no one is paying attention.  Very surprising since it is so obvious.  This is one of the reasons I see a lower low, but if it follows this pattern we will hit the 1080-1090 Pivot and rally into year end.  I say that because after the H&S broke in early 2008 the 1270 low was followed by a 1257 lower low (only 13 points).  Everyone is expecting that if we break 1101 then 1050 or 1018 will be hit.  The contrarian in me says otherwise since everyone is looking for it.  I will got out on a limb and stick with 1080-1090 as a guess (although I will base investment decisions when we get there not on some guess I am making today).  If we continue to follow the pattern than a rally to the 200 day SMA by year end would make sense (as you did 2 months after making the 1257 low in March 08, 1440 high in May 08: by the way, 1420 was the 50% retrace and 144o was the high intraday high).  In fact I can see the market meeting the 200 day SMA at the 50% or 61.8% retrace (1236 or 1267 area) in December which, of course, would be two months after an October lower low.  Now, that will be the mother of all shorts.  The shorts that the bears have been enjoying thus far have been peanuts relative to what they might be given if that happens.

Hope you enjoy the charts.

http://stockcharts.com/h-sc/ui...

Trust but Verify: How can anyone dispute that technical analysis wor...

Trust but Verify: How can anyone dispute that technical analysis wor...: We rallied to the 50% retrace level at the same time that we hit the 38.2% Fib Arc level and 61.8% Fib Fan level from March 09 low to 1370 h...

How can anyone dispute that technical analysis works?

We rallied to the 50% retrace level at the same time that we hit the 38.2% Fib Arc level and 61.8% Fib Fan level from March 09 low to 1370 high.  Is there such a thing as picture perfect?  Well, I think we will find out again in October or November where those levels all seem to converge again.  The 200 day SMA is currently at 1284 and on a path to cross at these resistance levels in October or November.  Talk about an terrific short opportunity!  If we get a lower low prior to then I will go long (currently in cash) and ride it up to those levels where I will build up short positions.  Just have to wait and see how it unfolds.  

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p05277897945&a=240861572&listNum=1

First from Trust but Verify

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=4&dy=0&id=p83897172592&a=240861572&listNum=1

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2007-11-01&en=2008-08-04&id=p15846033326&a=240861572&listNum=1

This is my first post so I will keep it short and sweet.  I am getting ready for vacation and will let the charts speak mostly for themselves.

There are disturbing similarities between what is occurring today and the beginnings of the 2008 bear market.  While the magnitude of the bear market might not be the same, it seems as if many things are repeating themselves.  And what I am most interested in are the charts.  Above there are two charts.  The first is today.  It is a three month charts that shows Fibonacci levels from both the bear market low of '09 to bull market top of 1370 and the most recent decline from 1370-1101.  You should also notice the trend line (red) from last years 1010 summer low and a Fib Arc drawn from the 1370 high to the 1101 low.  The right shoulder looks nearly identical to the '08 right shoulder formation.  The drop to 1101 was similar in time and size as the early '08 drop and now the bounce seems to be quite similar. We are currently at a point where RSI is higher than it was at 1208 just a week or so back yet price is still lower than those levels.  If we roll over prior to breaking the 1208 level then RSI will confirm a bearish formation.  I would also keep an eye on the 50 SMA.  The first failure in '08 came at the 50 day SMA and the second came at the 200 day as noted on the second chart.  

Lastly, I will leave you with this.  The Fib Arc, Trend line, H&S neckline, top of Ichimoku Cloud (weekly) (and possibly 200 SMA with the course it is on) all converge around EARLY OCTOBER.  Can it be?   I hope to bring much greater detail in future posts but have to run.

**note the second link ('08)...after the initial bounce to 1396, we sold off and bounced back to 1388.  Lower price level but higher RSI.....could this be a repeat?  Maybe.