On Feb 20, i made 1001 arguments as to why there was a potential for a ST bottom and a rally. It took one day for the market to crush all those beautiful arguments. If there's one thing i have learn't from markets, resist from making calls against the daily trend when the hourly is still in harmony with the daily. In other words, wait for at least an hourly turn.
On Feb 23 (the very next trading day), i followed up with an update on this blog and went bearish. Not because of what the price did, but because of what the NYSE breadth MCO did. I said, Nov 08 lows on SPX will not hold since the NYSE MCO has broken the Nov 08 lows. Nasdaq which has been giving the illusion of strength should also break below the Nov 08 lows, before all said and done.
Now here's the question that's bothering me. Why did we not even get a bounce into the 9 month cycle crest ? Did the crest come early ? Did we severely left translate ? If so, we could be seeing something like the action in 2002 where we got a July bottom. Now with the current breakdown, this becomes mostly an academic question. It really does not matter anymore whether SPX produces a sharp bounce into the 9 month top or not. The risk of a bounce should be handled with stops, in case it does materialize. If the move into the cycle crest was this bad, then what would be the scenario going into the 9 month cycle bottom in fall ? This market structure is very bearish and i am not sure what will/can turn it around.
Sorry, i don't have anything useful to say here, other than i am bearish and will continue to short bounces and cover oversold. That is, until some new information flows into the market.