Just a couple charts today and a brief comment. First, as you can see above, the rally off the August lows has pretty much been undone over the last two weeks. The steep slide has caused the 50 dma to turn sharply lower, yet again crossing beneath the 200 dma. Just to reiterate, the S&P topped last May which means it's been 8 months now without a new high. The longer this continues the more likely it is we've seen the end of this bull market.
I probably didn't even need to annotate this weekly chart of the Russell 2000 because it's so ugly. That said, I do want to point out a couple things. If you hadn't looked, small caps are down another 1.3% today, placing them firmly beneath the October 2014 Bullard Bottom. Momentum indicators are a disaster with MACD off the charts in the bad direction.
I can't imagine either index falling much more before a decent bounce, but I've clearly been wrong before. My big picture outlook remains unchanged - I think the indexes have topped and we're in the process of rolling over. Major tops take time (possibly years) to unfold. Look again at that weekly chart of the Russell. If we are indeed topping, then the process started in late 2013 - we just didn't know it at the time. Now is not the time to jump into the market if you're a long term investor.
I can't imagine either index falling much more before a decent bounce, but I've clearly been wrong before. My big picture outlook remains unchanged - I think the indexes have topped and we're in the process of rolling over. Major tops take time (possibly years) to unfold. Look again at that weekly chart of the Russell. If we are indeed topping, then the process started in late 2013 - we just didn't know it at the time. Now is not the time to jump into the market if you're a long term investor.
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