Experienced traders and investors analyzing markets on daily basis knew this in the beginning of August 2011. The market started this process of reversal in February 2011. we went sideways and we were creating a head and shoulders pattern (see my previous posts speaking about it during June and July, when this was becoming more and more apparent). SPY then broke the neck line in August (August 2, and following days) and then we went deeply down. Some called this as a new mini crash. Later on we entered into a bear consolidation and created bearish pennant. Some saw a triangle. Yesterday we broke the pennant too which was more then expected.
However, media started talking about it today and some even yesterday. That may be a sign of bottoming. We may see some more downward movement, but when we will see capitulation (a hysteria in the market), that would be the time to reverse my bearish trades. As far as now, I am still bearish, but cautious.
Happy Trading!
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