Since this was published, worldwide markets have been very weak. Japan has sold down deeply, and European markets are down as much as 9% for 2016. This raises the question "Will the markets in Europe and Japan catch UP (rise) to the S&P 500 , or, will SPY ( S&P 500 ) fall, and catch the weakness with much of the rest of the world"? I think that the S&P will sell down. I think the S&P 500 ( SPY ) is the "last man standing". Here is why:
The SPY has failed to put in new highs (just as the DOW 30 has failed to put in new highs). SPY is making lower lows. (This defines a bear market). THE TRANSPORTS ARE ALSO SELLING DOWN. In the chart above, the is drifting lower. The failed sideways trend since point D in the is showing that SPY is trading into the thick red "conversion" line of the cloud. Please note the dotted circles to the far right at $203.95. These are the "teeth" in an trade. The blue line above (the teeth) and yellowish line below (the teeth) are the lips and jaws of the .. They are now "closing", which suggests an end to trend (the is going to sleep). All three indicators (above the chart) are sagging, which is . I think when the "wakes up and starts to feed" (and the blue and yellowish line separate) the new trend will be lower. If the S&P 500 breaks the 200 day moving average at approximately 2015, I feel we will have a 2618 trade down to 1867. If we fail there then look for a retest of 1812, which I think will fail. If the S&P fails at 1812, then those who claim we are in a large trading range will be proven wrong. As the late, great Ed Hart would say: "We will all know in the fullness of time". I hope this presentation has been informative and helpful.
Yours for better trading, Don.