Top Advisors Corner

W.H.C. Bassetti: The ominous...


This is ten years of the market in weekly bars. A year ago at an AAPTA meeting, we told professional technical analysts that we wouldn't have a bear market until the long term trend line was broken. As seen below, prices have (so far) bounced off the long term trend line.

While that might provoke short-term joy, the post bounce is questioned by the nearby data and so the bottom may have to be tested. At best, we might have a V bottom, but considering the craziness of recent markets, it would be foolish to bet on anything.

At worst, rather ominously, we might be looking at a historic massive year-long top. And why not, considering the historic bull market since March 2009? It is quite possible that we are looking at a truly historic double top.  We would not call it a classic double top, but in these mad and bizarre times classic paradigms of any kind will shortly be tweeted to death -- or foolishly debunked as fake news.

The depth of this formation is approximately 3500 points. That would compute to a downside target of 19440.

Remember: we don't do prophecy here. We just analyze the charts operating from classic principles and report what they imply. Here, the implications are obvious: beware the bear and be aware that the risk is on the downside. Possible rewards are slim to non-existent for bulls.

W.H.C. Bassetti

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