The Bear Rally is over!!

A Bear rally occurs as a countertrend action. The 2008 sell-off sets the major trend downwards and the rally from 666 was the retrracement of the sell-off. However this sell-off was itself a major retracement of a multi-year bullish pattern and we shall expect it to print 3 major waves for a complete retracement. The bad news for the bulls is that the next move is downward, while the good news is that it shall be the last leg before we see a final recovery in the finacials markets.

I may get much slack for being so bearish at this point, but it is my belief, based on the evidences covered in my commentary, that any action upward in the near future will be only minor retracement from the main downtrend developing. Now do not get me wrong, I do expect these upmoves to reachup to 150 to 200 points on the S&P, in particular in the near futures and I will look for this one to remove any position money off the table.

I cannot see any major news or governmental actions at the moment which could promptly avert this action, and as traders we shall remember that history is an important part of the future. Just take a look at the 1929 through 1933 S&P or Dow chart and you will see what I talking about.

Dim lights

Have a great trading week.. trade on evidences, have a plan, execute the plan.

Stay Green.

J-P