Weekend Update'1 - Weekly Index Cycles

A decisive week for the bears. The monthly world index cycles have been warning of trouble as early as January. This week absolutely confirms the overall outlook. Whether we get a bounce - of whatever size, seems a secondary issue now. This market is going down into the sp'1100s at some point this year. Whether 1100 is the floor, well, we'll just have to see what happens when we're at that level.


IWM

NASDAQ Comp

Dow

NYSE Comp

SP

Transports

Summary

More than anything, the Transports index was the key. As I've been saying for many weeks now, watch for a break. A strong break we have seen, and it one to the downside - the monthly chart highlights this even more starkly.

Q. A bounce is coming..or just a straight elevator to hell ?

There is a lot of chatter about whether this is a 2008 style (or worse) collapse wave, or if we can bounce to say 1380 - before a wave'3...or even put in one final June high. I think I'll cover that later this weekend, for now, I think most can agree.. we have now red 'SELL' flags EVERYWHERE.

The daily and weekly cycles ARE oversold, but neither show any sign of a turn yet. The VIX @ 25 is further added confirmation of the overall bearish summer 2012 outlook.

More later...dealing with the possible paths from here.