Chart Thoughts Heading into the FOMC Meeting

A few ideas I've been mulling. Some of these aren't new, but are timely again in the context of a rally. I'll start from big to small.

1. Bear markets are not merely 20 percent declines. A bear market is big in time and in price. The Nasdaq fell 30 percent over a couple of months in 1998 and you don't hear anyone refer to that as a bear market. You did hear people refer to the stealth bear market in value stocks from 1998 and beyond. There has been a bear market in ARKK, crypto and similar investments. There has been a bear market in gold miners and emerging markets. There has been a bear market in treasuries. There has not been a bear market in the major stock indexes if the bottom is in. Moving averages such as the 200-week moving average aka 50-month break in bear markets and once they're through, they go way lower. They do not break in bull market corrections or do peek-a-boo fakeout.

2. Bear market rallies of 25 percent are normal. There are much larger rallies in the most beaten down indexes or in very long-term bear market, such as Nasdaq in 2000, the 1929-1932 DJIA, 1970s DJIA, the 1989-??? Nikkei. A 25 percent rally from 3500 goes to 4375.

3. The DJIA is only down about 10 percent from its all-time high. The long-term chart looks like this:

4. Everyone is watching areas between 3900 and 4100. My sense is there is higher upside possibility to the degree bears are too aggressive or too skittish, but the Federal Reserve has to cooperate for a continued push. My sense is the market is moving into a binary event where the rally either has two or three days left, or it has many weeks left and people will be talking about new all-time highs come January (at least on the Dow).