Putting aside the exhilarating possibility that the Mother of All Bear Rallies has finally breathed its last, we’ll want to verify the progress of this selloff one delightful day at a time. For starters, it is a healthy sign (for bears, that is) that the initial downthrust slightly exceeded a 1312.00 ‘d’ target that comes from the five-minute chart (see inset). Also, because a decline that is impulsive on the hourly chart has begun from a high that narrowly failed to achieve a clear rally target, we should infer that the selling will continue, at least for a while. That said, the 1356.00 rally target itself remains viable in theory, and we should never turn our backs on history’s stupidest, if most pernicious, rally. Our clue that bulls have may at least one more gasp left would come today on a print exceeding 1339.75, a look-to-the-left peak made Monday on the way down.
