Long Term Bear Market Scenario

Today, I mentioned that a bull run to the 1916.80 top of the Fib Extensions, if it were to occur, does not affect either the long term Bear Market Scenario, or the long term Bull Market Scenario. As a reminder, here is the calculations for the 1916.80 top of the Extensions. 1916.80 is Top of the Extensions. As I updated the Long Term Bull Market Scenario last week, Long Term Bull Market Scenario, I thought it would be a good time to update the Long Term Bear Market Scenario to show why I believe another run higher to the 1916.80 is not the death blow for the bear scenario.   Without going into the reasons why, I believe that middle move in the equity charts is a triangle. Here is the triangle reflected on the Bull Market Scenario: Here is the triangle reflected on the Bear Market Scenario: Now, if I am correct that is a triangle in the middle of the up move from 2009, then it either has to be (1) the end of the entire bear market, or (2) a B wave in an ABC up.  If it is an end to the entire bear market, that would mean that the start of the new bull market occurred in 2012, and we are in a wave 2 correction, or will begin a wave 2 correction after hitting 1916.80 fib resistance.  If it is a B wave in an ABC up, that means it is bearish and we are going to take out the 2009 lows.  Thus, if we break the 2012 lows, that negates the primary Bull Market thesis and a return to the 2009 lows and below (SPX 430) is in the cards. This would mean that we are in the beginning of that move, or will begin that move once 1916.80 resistance is hit. That area is key because this bearish ABC pattern (flat) does not go beyond the 138.2 extension area, which also happens to be our shorter term (though still big chart) 1916.80 fib extension resistance.  If we are not already in our down move to towards the 2012 lows off the January 2014 top, then either pattern can hit 1916.80 and sell off. That sell off will be either a wave 2 correction of the initial wave up off the 2012 lows (bullish scenario), or the beginning of a sell off to sub SPX 667. The 2012 lows are the key to the puzzle. So, 1916.80 if exceeded and held would be the end of the bear market scenario.  The bull market gets negated, and the bear market scenario becomes primary, once the 2012 lows are taken out. Until we do take out those lows, however, the bull market scenario is alive and well.  Short term, this is why I noted today, that if we hold the moving averages on the weekly chart this week, I have to consider a setup for a run to that 1916.80 area. Until we hold those averages to trigger the setup, however, we are still in a down trend on the short term charts and must presently presume we are already in the correction and not going to the 1916.80 top of the extensions. If we do hold the weekly averages and run to 1916.80, then the ensuing sell off will be the correction that will test the wave up off the 2012 lows and finally tell us if this is a bear market rally, or a new bull market.  There is always a bear path and a bull path. We cannot know which path our future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions.  Peace, Om, SoulJester