We were ready for the New Year’s top at 1846.50 because it missed a major Hidden Pivot target (see inset) by a single tick. I’d said at the time that it would take at least 5-7 days for bulls to make another run at the high. However, we should remain open to the possibility that a far worse correction — or possibly even a bear market — has begun. We’ll know more when we’ve seen whether a ‘hidden’ support at 1796.25 contains this selloff.  But if there is no bounce from that number — or worse yet, it is obliterated on first contact — the futures could slide all the way down to 1694.40 (the red line) before finding good traction.

None of this negates the possibility of a powerful rally that would take this vehicle to 2000 and the Dow to a target at 17622 that was broached here previously. In any case, I’ve already predicted a correction in the latter to at least 16067 before any big rally could begin. But to repeat: We should be alert to the possibility that a far more bearish scenario impends. In the meantime, we’ll closely monitor rallies and pullbacks on the lesser charts, since, if there is still life in the long-term bull market, minor corrections to the downside should not reach their targets; and minor rallies, even corrective ones, should overshoot theirs.