Technical Capitulation Time, But Nothing Good Otherwise

Looking back at 2008, the most recent bear market, there is an analog. The 2008 market bottomed in January and then tested that level in March when Bear Stearns collapsed. The test held and there was a rally into May. This time, the low came in May and the bounce is a few weeks later. I don't place a lot of confidence on this analog except that in both cases it was a rather clean h-pattern. Failure to move lower from here would be bullish.
If going lower, there is a trendline around 3700 formed by the 2011 and 2016 lows, mapping to $370 on SPY
The "target onn break" is where there is major support. I think that is a very viable target here for one reason only: it makes sense for the big picture. A plunge down towards 3400 would allow for a massive bounce back up to aroud 4300 (a 25 percent rally), although I think something like the 4100 makes more sense.
That's the big general direction. There can be ping pong action between levels, but eventually 3400 will be hit and that should mark the end of round one for this bear market. There will be a big rally and then round 2, wave 3 in Elliot Wave terms, will begin.

While there are signs of capitulation such as the roaring VIX this morning and short-term indicators will scream "oversold" today, nothing is improving. The bond market broke down. We are in free fall territory now and every time bonds drop, the valuation of stocks drops. This may or may not be important in the present, but it matters for the question of "Is this a bear market?"

Similarly, crude oil hasn't cracked yet. How does the stock market's long-term outlook improve with rising commodity costs? Only by become much cheaper.
Finally, I have seen people still expect a Fed pivot, or that stocks will drop until the Fed reverses. Same thing I've said going back to last year: the Fed won't change until at the very least, crude oil tumbles. Until then, there will be no change in policy. If crude rises and bonds fall, then the Fed is trapped and must contiue raising rates until it inflation comes out.

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