Just a technical observation. I love various oscillators, because they help me to visualize the market internals. This weekly chart (link) shows the relationship between percentage of the S&P 500 stocks over 200 day moving average and over 50 DMA (click to zoom).

As you can see in the bull market the 200 DMA line is mostly above 50 DMA line because many stocks oscillate above and below their 50 DMA but they mostly stay above 200 DMA. In the bear market it is exactly opposite. I think you can use this chart as a definition of a bull or bear market, not a single definition, but one of the best out of many.

This chart gave you a perfect, amazing warning back in October. The 200 DMA line in freefall while 50 DMA line was making another high.

Let zoom the same chart to the daily one (link):

I don’t think I can fetch from this chart where stocks are going next week but I can clearly see that we are deeply in a bear market. Only 40% of stocks are scrambling above 200 DMA while 70% of stocks are flying above 50 DMA.

I think the well-pronounced top in the current counter-trend run will happen when the 50DMA line will start making lower highs (examples – late October and late December)

Update: I’m adding the chart from Eugen comment:

As you can see it is indeed a very good indicator during bull market. But now it is on uncharted territory

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