In after-hours trading the futures were inching toward the 1896.75 target shown (see inset; this Hidden Pivot support was broached in the chat room yesterday with the December contract trading around 1926.). The Dow would have been down nearly 600 points if the target had been hit by the bell, and although this threshold seems very likely to be achieved, bulls may argue in retrospect that it could have been worse, that the pain was at least spread over two days.  I expect a tradable bounce precisely from the target, but if it fails to materialize and the selling snowballs, we’ll see a minimum 1874.75 before buyers can attempt to levitate this brick with any hope of success.

Although it’s not yet possible to assert that the Mother of All Bear Markets has begun, it’s worth recalling that some first-rate technicians quoted here a few weeks ago said as much. The boldest and clearest pronouncement of all came from Bob Prechter’s Elliott Wave Theorist: “Next week, the U.S. stock averages should begin their biggest decline ever.” So far, so good — good, that is, if you believe that only the most devastating bear market imaginable is capable of purging the financial system of the lies and epic folly that have sustained it for decades. It won’t be pretty, but how else is America ever going to return to honest business?