IWM, bearish outlook
SP' bearish outlook, count'3
Dow, daily
Transports, daily
Summary
I think the above 4 charts make the near term outlook very clear. We have the bear flags on the indexes already starting to get confirmed with today's move lower.
We will know for sure that a new bearish down cycle is underway when we break Sp'1300 - which could come as early as tomorrow. A new high for the VIX in the 26s would be added confirmation.
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So...a good day for the bears, and I will say that its always good to see the bear flags play out. The issue now is whether we fall to the lows from last December..or November. If its December, that's around 600pts lower for the dow, around 60pts from the SP...so..maybe we're looking at 1260 - as the completion of the first major wave lower.
It will be important to keep a close eye on the VIX in the coming days. Especially, look for a VIX spike day- or even a opening VIX gap up - which turns into a black doom/fail candle - warning of a VIX peak - and conversely...the market indexes flooring.