I’ll go with the daily charts here to drive home a focal technical point about what I am seeing in this market right here, right now.

Of the major indices, all of them have now breached their (still rising) 200-day moving averages, save the S&P 500. So, with the S&P losing 1390-1400 support today, you have to ask yourself whether the S&P coming into its 1380 200-day would be more of a sign of a fresh leg lower, or instead the lone holdout finally acquiescing in the late-stages of a correction.

We know that Apple’s downside trajectory over the past two days is consistent with (short-term) capitulation after a 20% straight-line down correction.

Back in early-June, your saving grace to not get caught leaning short at that major bottom was to respect the still-rising 200-day moving averages on the indices, despite the prevailing sentiment at the time. Eventually, all 200-day moving averages cease to rise and fall over–It’s just the way the market works with alternating cycles.

Nevertheless, the market usually does not make it so easy for bears to simply breach the rising 200-day and then go through a quick metamorphosis into a vicious bear market. If you look back at the 2007 cyclical bull top, there were countless sharp rallies from 2006 through late-2007 before we eventually rolled over.

Is it different this time?

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