However, the downside momentum often creates an overshoot where we breach the lower boundary temporarily before snapping back inside the channel. When that happens the low of the move often creates the anchor for a new, less steep (and probably healthier long-term) trend. It is my opinion that some variation of this is the most probable scenario barring new economic news that changes the fundamentals.
Lastly, it should be noted that the main bull market is considerably lower. This originates from the bear market lows in 2009. If we were to correct all the way down to that line it would meet the definition of a bear market by popular standards (a decline in excess of 20%), but in technical terms we would not be a bear market if the trend remains intact. This highlights the problem I have had with the market for the last couple of years. While I don't think this is a probable outcome at this point, it is a dangerous reality of a 'hot' market. History has shown that we will eventually revisit the main and the farther we move away from it the more shocking the decline just to get back on the 'normal' pace.
One thing is clear though. Note the more quiet price movement of the past two years prior to February and compare these last few weeks to that. Price was slowly gliding upward, bouncing between the channel top and bottom. Now it is moving more sharply, reflecting the increase in volatility. Any change from the status quo introduces uncertainty which often ushers in volatility. If Chairman Powell signals a dovish approach we could see volatility subside and price continue to press higher. If his comments sends rates higher we could see more selling once again.