MarketTurningPoints.com
Chart Pattern and Momentum
Enough time has now passed to define the major trends of the stock market. In this weekly chart, we show two main channels, one outlined in brown -- the current main bear market trend and, contained within that one, another outlined in green which represents a secondary market trend which could be a primary decline all by itself! In order for this bear market to be over, prices will have to move out of the brown channel completely! This will take some time, and will probably not happen until next year. Unfortunately, this will probably not be the end of the entire decline. This is likely to only represent an "A" leg of the total bear market, with "B" and "C" legs to come and to conclude sometime in 2012-2014. This is when the very long 120-year cycle is expected to make its low. By then, the SPX should have declined to about 350-400. So much for the "hold stocks for the long term" theory, and the economy showing signs of recovery!
On the chart, I have also labeled what I believe is the correct EW structure. Time will tell and it does not really matter at this point. Cycles and a quiver full of other methodologies will help to determine the future market course. For the time being, the oscillators are still in a strong uptrend with no bearish indications.
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