On January 24, with the E-Mini S&Ps in a steep climb and trading around 2840, I wrote here that I “expect to see real stopping power within perhaps 4-7 points either way of 2868.50.”  Two days later the futures made a high at exactly 2878.50 (see inset) from which they have since fallen 121 points. Is The Top in? My gut feeling is no, that once this correction has run its course we will see a renewed push to at least marginal new highs before the nine-year-old bull market ends. There is also a chance that any such resurgence would produce more than a nominal high, going all the way to 3270 before the bull breathes its last.

I raise the prospect of failure at a nominal new record high only because it would set up the nastiest bull trap I could conceive of. It would turn bulls giddy once again while forcing shorts to cover with reckless abandon. That, as far as I can imagine, would put a fitting end to a seemingly invincible bull market. For the moment, however, we can only ride out the current selloff, which seems likely to continue. A further fall of just 82 points would wipe out 2018’s spectacular gains and muffle Wall Street’s hubris for a blessed while.  It could then take weeks or even months to build a base for a rally to new highs. For now let’s simply enjoy the show, secure in the knowledge that we cannot be fooled if we observe the process in a disciplined, mechanical way. For starters, that will entail placing an alert at 2651.50, where a print would turn the daily chart impulsively bearish for the first time in more than two years.