Major Support Lost, Bulls Enter Anger Phase

The S&P 500 Index hit the 2009-2018 trendline yesterday. The only breach was during the March 2020 panic. I don't have it drawn, but the S&P 500 and the Nasdaq also pierced a trendline from the March 2020 low and the June low.

I have seen many targets of around 3500 for the S&P 500. The target off the topping pattern (higher blue horizontal) is $338 on SPY, which translates to around 3400. A bottom at 3500 would leave this bear move unfulfilled so to speak and would not signal an end of a bear market. I would change my view of this being wave 3. I would see June as wave 3 and this as wave 5 completion of the larger Wave I of the bear market.

BTC has major support around $17,800 today and it rises to around $18,000 by the end of the month.

Long-term government bonds have been in a steady decline since August. They haven't broken the downtrend yet, but this is the closest they've come to turning higher. And it's gone. Bonds plunged to a new 52-week low as I was composing this,

Crude is rallying hard along with commodities and gold. The U.S. dollar also pulled back after the Bank of Japan intevened in the yen market. This all bd news for stocks.

The Kübler-Ross model of emotional stages are denial, anger, bargaining, depression, acceptance. I think the denial phase of the bear market is over. Why? I noticed a lot of "why is the Fed doing this?" type comments on finance social media. If bulls think it is a bull market, they think the Fed has their back. When they realize it won't bounce, they start asking "why is this happening?" and look for someone to blame. I also noticed some bearish or contrarian accounts that usually get heavy trolling (often incited), start getting more serious questions to explain, "Why is this happening?"

Zooming out to the wave count, I could see the bargaining phase kicking in quickly if the 3500 area is the low. The market rallies into 2023. Then comes the depression phase, wave 3, the major down wave of the bear market. This isn't predictive, but rather hindsight application of the emotional state. It isn't very useful except at moments such as now when you could make a strong case for a rally after a 10-percent drop in stocks. Yet instead, it might be as good of a shorting opportunity as in mid-August.