Bears Pound the Market Lower - Posted by Coolhand

Yesterday, I said that both index charts were showing action that may be preludes to something bigger down the road. I said the action (up to that point) wasn't ugly yet, but that I would not want to be in the market should ugly show up.

We'll, I don't know if ugly showed up, but his little Brother might have. Ugly may be next.

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Priced gapped lower on both charts at the open today and drove lower for the remainder of the trading day, closing near the low of the day. Price on the S&P closed short of testing support at the 50 dma. Of course, price is already below the 50 dma on the DWCPF, which is now testing horizontal support around the 2055 area.

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Selling was widespread as cumulative breadth fell hard and is now bearish.

While we've seen this kind of selling on occasion in the past, I am not so sure the market will be recovering quickly this time. I could be wrong, but let's not forget how long the DWCPF remained in a trading range. It seemed to be telling us for weeks something was coming, so this may be just the beginning.

NAAIM reports tomorrow.

While the market may find support soon (I am not convinced), I am moving from a neutral sentiment to a bearish sentiment as I suspect market character has changed. I may be ahead of the market, but then again I may not.