150+ S&P points later, we got a retest.
Bulls need bears.
NOTE: The chart below is not the one referred to above is his recent letter, but it does contain his March quote.August 30, 2007:
This chart, from February 2007, shows the weekly S&P and NH-NL on the left and daily on the right. The technical signals in both timeframes are similar, confirming each other's messages.
You can see a false breakout to a new high, above the dashed yellow line, with no follow-through (Camp graduates often call this 'a David Weis line' in honor of an instructor who popularized them). While the market is struggling near the top, the NH-NL Index shows bearish divergences in both timeframes. They tell you that the rally is poorly led and likely to collapse. You can see a bit more of the history on the weekly chart, which shows you that previous divergences also marked tradeable tops.
Turning to this summer, we see a very similar picture: a false upside breakout across a 'David Weis line' accompanied by even more severe bearish divergences. This chart was shouting to sell and sell short prior to the summer's break. History repeats itself – just not exactly bar for bar in the markets.
Turning to the right edge of the chart, the question arises – have we seen the bottom of this decline? Not according to NH-NL. Its recent record new lows, with no sign yet of any bullish divergence, promise more profits for the bears and more trouble for the bulls.
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=3&dy=0&i=p58867347694&a=100344124&r=8184.png
Edited by Rogerdodger, 31 August 2007 - 08:14 AM.
As I said in my last comment about "Mr.Bear".... we need another gap up in order to lock the bear. In other words... if we hold the gap, the bear would be in real trouble. 
From Roger: Yuri, maybe this guy puts hi e-mail on that string?
