I am open to a big pivot here. In “The Great Bear Case,” I began pointing to the mounting and troubling signs in the markets and I added thoughts here, and here (and in a few other places as well). That wasn’t all for naught as we soon entered a terrific corrective period. Those signals pointed to a topping process and in such an expensive market, we must remain open to the possibility that any particular top isn’t just a top but rather the top. And so I was open to that. So what’s changed?
Well, for starters, this is what I wanted to see. A real expansion of range to the downside. I think I even referred to that as a “murderous expansion of range” at one point. Doing so would allow us to interpret the move down as a genuine impulse, from which we would have no doubt about what was coming. But we never got it. I set conditions and they weren’t met.
Furthermore, Twitter has provided me with an invaluable insight into participant sentiment. And in the early stages of the decline, I was full on bear-tard and got so much pushback. It was delicious. It gave me confidence that people were, in fact, hyper bullish there and that we would continue the decline (and we did). But in the last two drops (in which we barely made new lows) a huge swing in sentiment happened and people (so it seems to me) swerved wildly to the other extreme. Everyone is one foot out the door. Markets just don’t top that way. And now that I’m announcing my renewed bullishness publicly, again, I’m getting tremendous pushback. What we need to see is a huge impulse down in which everyone sighs with relief and says, “That’s the much needed correction we’ve been waiting for.” That’s when it’s all over. And that’s not here. Not even close.
Let’s do some charts.
I first noted that $QQQ formed a high-probability triangle here and that’s still good. And that leads us to the problem of what to do with $ES, which is difficult to count here. I had been viewing the move as a leading diagonal, but Friday messed things up:
- The green arrow low should have been the overthrow low, the final leg of the structure
- But if so, we should have exited the structure in a much larger wave two and the orange arrow high is much too small for that to be the case
- But it would have to be since we made a new red arrow low

Read more “The Great “Bull” Case”
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