READ THE FULL POST HERE:
http://www.thebullbear.com/profiles/...ch-2011-bottom



Here on the hourly chart we can see that DAX clearly has the potential to produce a 5 wave bear structure very soon:

Japan's stock market crashed below its prior major low in a matter of days. Is this a major wave (ii) buying opportunity after a long term abc correction or a break of key support levels ushering in more bear market for Japanese equities. I tend to think the latter at this time, but we shall see.


What are some of the technical indications that would put us on notice that either a larger correction or a bear market are in progress?

If the long term chart of Summation Index were to break below the black horizontal support level it would probably be sending us a bearish signal:

If the 50 Day Volume of Declining Stocks continues to rise even as the market rallies or moves sideways next week we might have cause for concern:

Here's a few more things to watch for:
VIX breaks above the previously indicated resistance levels and stays there
Treasuries move above the 200 EMA and stay there
Emerging Markets break down below the 200 EMA and the recent proposed C wave low
The group of indicators show above do not find support at current levels normally associated with intermediate term bottoms and instead break lower
NEXT WEEK MAY BE THE MOST CRITICAL WEEK IN THE MARKETS SINCE APRIL 2010! THINGS ARE AT A CRITICAL JUNCTURE AND VIGILANCE AND THE ABILITY TO TAKE QUICK, APPROPRIATE ACTION IS REQUIRED. RE-READ THIS REPORT SEVERAL TIMES AND MAKE SURE YOU UNDERSTAND IT!!



US DOLLAR INDEX


The US Dollar Index has broken down from a four year pattern. There is every indication that it will continue lower. There is not much on this chart that gives a bullish indication at this point and it strikingly resembles the pattern in USD.JPY before the recent panic breakdown, but on a much larger scale:

The best wave count here is that a Wave iii is now underway. This is coming even during a period of substantial selling in risk assets. While AUD.USD and NZD.USD have shows some significant weakness, the European currency pairs have been strong against the dollar (Euro, Swiss Franc and Swedish Krona). Canadian Dollar is also at multi year highs.
What does this mean for markets? Generally a weak dollar has been associated with rising asset prices. A 6 month correlation grid shows an almost across the board negative correlation with other asset classes. (UUP is the US Dollar Index ETF):

Stock and commodity bulls should be encouraged by this technical failure in the USD...unless there is some critical economic or financial dislocation that is associated with such a failure. Is there some as yet unknown crisis associated with a falling dollar in the wings?


CONCLUSION

This is the most important edition of the BullBear Market Report that I have written since the July 2009 bottom. I remain bullish but for the first time since then I am on alert for a bearish turn. Much depends on the action in the markets early next week. With a decent thrust through resistance we can be confident that a move higher has begun. New positions should be kept on a tight leash and monitored.




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Good luck and good trading! Ask questions and comment below in the discussion forum!!

Reply by Steven Vincent on March 21, 2011 at 11:08am

03/21/11 UPDATE:

Very nice rally to take out several resistance levels and the A wave low:




Penetration of the A wave low makes a 5 wave bear structure much less likely and makes a 3 wave bullish corrective structure much more likely.


Once again, we nailed both the top and the bottom virtually to the tick!


The upside potential of this 5th of (3) wave remains unclear. We will have to see how far this wave i goes and take a Fibonacci extension from there. So far it looks like an very powerful wave, since the A wave was taken back in just 3 sessions.


SPX is also back above the 20 and 50 EMAs:



A close above those levels would be very bullish.

I didn't find any other analyst who utilized the basic technical analysis technique of channelling to identify this bottom. Drawing a trendline from proposed 1 to 3, make a parallel line, drag it down to 2 to create the channel. Instead there was generalized panic, extrapolating further declines from the very short term downtrend instead of trying to see the long term uptrend. Bearish expectations and bearish mentality still prevails, which means the bull market is not likely near its end.


Reply by Mae Woo on March 21, 2011 at 6:08pm

What about all the gaps up at the open that were made in last couple of trading days?
Will they not be filled? Or is that important.

Reply by Steven Vincent on March 21, 2011 at 6:47pm

Gaps are frequently but not always filled. I think that if today's gap were filled it would probably come as a minor ii pullback and make a great entry opportunity.

Reply by J CHAN on March 21, 2011 at 10:20pm

Volume was lower than previous day on quadruple witching Friday. Unusal. Volume was even lower today than Friday. I really can't buy into this without a retest and a up day with confirming volume. Spy is now right below the top of the Ichimoku cloud and heavy resistence. If it is to reverse lower, tomorrow will be the starting day. Guess what, America has started any other war. Stocks always go up when that happens ???

Reply by Ricky Latham on March 21, 2011 at 11:29pm

I was concerned about lack of volume also. Does not seem too convincing at the moment. Took some profits off the table. 10d EMA < 20 and <50 and 20d EMA seems poised to cross below 50. Isnt next couple of days pivotal to declaring a continued surge up or rollover in momentum? If we fail to exceed the peak of around 7Mar does that suggest a change in upward momentum?

Reply by Steven Vincent on March 22, 2011 at 12:55am

Dear people, your comments are all highly reflective of the "Wall of Worry" that bull markets climb. You feel you need to worry about something and it keeps you on the sidelines waiting for some kind of confirmation that never comes. Waiting for everything to line up perfectly so you can feel safe in entering a position. The safest time to enter a position is when there is panic and we had a panic bottom last week. I spent many many many hours compiling pages of technical data showing you that a buying opportunity had been produced. This is solid, real world technical data in this report that has been PROVEN over the entire course of this bull market. Yet you are focusing on things that have been entirely DISPROVEN like volume. If volume is your criteria then you have been out of the market or short since March 2009. Is that the right side of the market? In a bull market you must AGGRESSIVELY buy the fear dips like this obvious overreaction to the Japan situation. Particularly when the panic aligns with the technicals, as I have show clearly in this report.

Furthermore, I have given you a clear set of criteria under which we should turn bearish. A real, solid, actionable set of criteria that you can monitor and measure.

Yes, this current move is at a resistance zone, which I have defined for you. If we break higher, then we are looking good. If we turn down from resistance, it may be a pullback to fill the gap and give us a second chance entry. I would buy then, but on a penetration of the prior low I would stop out of the position because at that point we would have a five wave bearish structure and I would have to re-evaluate the situation.

I'm not trying to be harsh with you, my friends, just trying to give you the benefit of my experience and knowledge which has cost me so much time and money to acquire, in the hopes of saving you some time and money.


Reply by Steven Vincent on March 23, 2011 at 11:34am

03/23/11 UPDATE:

So far we have a minor abc correction of the move off the bottom:



It may have already completed. A move above the blue downtrend should confirm that the next leg up is in progress.


Reply by Steven Vincent on March 24, 2011 at 1:51pm

03/24/11 VIDEO UPDATE:


WATCH FULLSCREEN: http://www.youtube.com/v/f4xVLHVD2xw


Reply by Steven Vincent on March 25, 2011 at 1:09pm

03/25/11 VIDEO UPDATE:


WATCH FULLSCREEN: http://www.youtube.com/v/O6wbQk8qj1U


Reply by Steven Vincent on March 28, 2011 at 1:30pm

03/28/11 UPDATE:

SPX futures is at a minor resistance zone which is causing some sideways churning and likely creating a wave iv flat:



The top of the first wave off the bottom will probably come this week at the confluence of two Fibonacci extension targets.


Reply by Steven Vincent on March 29, 2011 at 12:43pm

03/29/11 UPDATE:

SPX futures show a probable minor iv bottom:



Chances are pretty good we will be back down here on the Wave 2 correction to retest the breakout, a possible 23.6% retracement level and the 20 EMA. That would be a good intermediate term buy point.


Reply by Steven Vincent on April 1, 2011 at 12:36pm


04/01/11 VIDEO UPDATE:


WATCH FULLSCREEN: http://www.youtube.com/v/dr3ln7Huc_E


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