POST 2008 BOUNDARY CONDITIONS SEND A CAUTION

What this chart tells us:

  1. The black trend channel has provided support for major sell-off actions since 2008,
  2. The 200 DMA's 4 Standard Deviation Bands have supported all major sell-offs since 2008,
    1. Often the Black Trend Channel and the 4 Standard Deviation boundary point have been one and the same,
    2. On a couple of instances price sell-offs have only glanced the 4 Standard Deviation and failed to reach the Black Trend Channel.
  3. Though a touch of the Black Trend Channel & 4 Standard Deviation boundary point are likely they are not a prerequisite. The market is so close to the long Term 2008 Boundary conditions that any Monetary or Fiscal policy announcements by Fed/Congress or ECB/EU could trigger an explosion higher. Bear Market Rallies are almost always violent and dramatic,
  4. This chart must be examined in concert with our recent charts post found at: REPRICING OF RISK SUGGESTS AN INITIAL MARKET SUPPORT LEVEL