50 replies to this topic

[dTraderB]

DoubleLine Capital CEO Jeffrey Gundlach said Monday that he "absolutely" believes the S&P 500 will go below the lows that the index hit early in 2018.

"I'm pretty sure this is a bear market," Gundlach told Scott Wapneron CNBC's "Halftime Report."

"We've had pretty much all of the variables which characterize a bear market," Gundlach added.

 

The S&P 500 is not in a bear market yet, down 11 percent from its record high reached in September. Wall Street traditionally defines a bear market as a decline of 20 percent or more. The S&P 500 fell as low as 2532.69 in February, a little more than 2 percent lower from where it is now.

Stocks fall into a bear market typically after "something happens that doesn't make any sense at all," Gundlach said. Cryptocurrency is the "mania" this time around, he said. Gundlach said bitcoin is an indicator of the market getting ahead of itself, much like during the dotcom bubble when technology companies "were being IPO'd that had no sales" or in 2006 when subprime lending "went on longer than it should have."

Bitcoin began to fall early in 2018. "One after another you start to see various sectors of the market give it up" after cryptocurrencies sold off heavily, Gundlach said.

[dTraderB]

So much for that ST low, market returned with a vengeance and blew thru it! 

 

Now another rally attempt in progress

 

Gundlach/Cramer double blows had the market reeling

 

 

 

[dTraderB]

SPX 2400 just 35 points away! 

[dTraderB]

Added MAR 2019 SPY 250 calls

Now holding 17 SPY calls

[Darris]

CNN Fear and Greed jumped 4 points during the day from 6 to 10.  Close right now is 10 due to VIX reading moving to neutral.  Crazy.

[RagingSpartan]

All rallies should be sold. No need to the play the long side.

[dougie]

All rallies should be sold. No need to the play the long side.

Got any targets before we should see a sustained bounce?

[dougie]

 

haha 

 

Our first job as chartists is to identify the bigger trend at work. Once trend direction is established, we can then direct our focus and set our trading bias. I try to focus on resistance, bearish setups, and bearish patterns during a downtrend. By extension, I try to ignore dubious support levels, bullish setups, and bullish patterns. I am working under the assumption that the bigger downtrend is the dominant force at work. A downtrend environment favors bearish resolutions over bullish resolutions. Bearish patterns have a better chance at success than bullish patterns, while resistance levels have a better chance of holding than support levels. It is all about probabilities.

Invariably, there is always another support level below current prices and we could draw dubious support lines all day. Marking support levels in a downtrend is just creating more noise. The chart below shows the S&P 500 with at least nine possible support levels. As far as I am concerned, the trend reversed with the price breakdowns and bearish breadth signals in mid-October. Once the trend turned down, support levels based on prior lows became noise in my book.

There is probably one "critical" support level in this bunch, but good luck picking the right one. The S&P 500 is clearly not "On Trend" and I will not be marking support levels until the index actually reverses its downtrend. In Dow Theory terms, the onus is on the bulls to prove the bears otherwise. Until then, I will respect the downtrend and be a good Grinch. Merry Christmas and Happy New Year!

https://stockcharts....edaboutit-.html

 

 

Good Prognosis - the weekly trend  below agrees. Bearish 17/43 EMA cross on the weekly.

Agree on Selling into any bounces, and your dubious floors for 2019 may all still be too high....  2150????

 

 

that 2150 area looks reasonable:

[dTraderB]

All rallies should be sold. No need to the play the long side.

Bounce to SPX 2720 into 2019 before longer & bigger decline 

[RagingSpartan]

Too many looking for a rally to sell. Don't get cute on the long side.