I’ve given the bulls the benefit of the doubt because it’s prudent to do that. Many bear markets in history are “one and done”—we hit the 20% area and off we go again. But, one also cannot take that too far, and I really don’t like the structures we are building on anything right now. And frankly, we might actually be in very serious trouble.
There just isn’t a good bid under the market. I have not yet seen any good signs of institutions stepping in at any low and gobbling stuff up with appetite. And when we look at things like $MSFT, the next moves available to us start looking very dark. That doesn’t mean what I’m about to show is going to happen, only that the potential is here.
We have a down channel. We have a midline which has served as a magnet from both highs and lows. We pierce it all the time, as we are now.
IF we sell off again, we’re going to breach a very important long-term trend line for the second time. And when we do that twice, the first time often weakens it, and it means the second time we do it, we may lose it for good. So, potential here for something super bad. Unless we actually get a Fed pivot, this can go a lot lower and take a lot of things with it if it does. This is the sort of setup that can produce a real waterfall.
I hope I’m wrong to point this out, I hope the Fed pivots, I hope we can go on with our lives. But, we need to know this risk.
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