The pattern shown, with its beauty pageant-quality impulse leg, looks like it could serve our trading needs for weeks or even months to come. It tripped a sell signal earlier this week at 171.41, implying that any rally back up to the green line can be shorted ‘mechanically’ with a stop-loss at 179.61. Thereafter, a precise bounce from p=163.21 seems sufficiently likely to warrant tightly stopped bottom-fishing at that number. This would still be the case if DIA simply collapses in the days ahead, covering the 573 points to the target in mere days rather than weeks. If and when the ‘D’ target at 146.82 is achieved, the Indoos will have fallen 3388 points from the secondary top in November, and 3653 points from May’s all-time high. In percentage terms, that would represent declines of, respectively, 19% and 20% — a true bear market and presumably just the start of a much larger one.
