200 DMA Failure Confirms Bear MarketNow that the indexes have broken out of the last major down channel (drawn in blue), the 200 day moving average (in purple) is the next major resistance. The S&P 500 has failed to hold above the 200 DMA three times since Oct 2018. Holding above the 200 DMA is the real test of being in a bull market or not--bull markets hold over the 200 DMA for extended periods while bear markets are rejected at the 200 DMA. Having another major market turn at the 200 DMA, (especially without having retested Dec lows or even built any significant resistance points on the way up) is going to look very BAD in my opinion. But the market is so over extended now I don't see how it can rally over the 200 day MA and hold.
So the market moves up, whistling bullishly, oblivious to the bear market confirmation it has primed itself for. This rally has been impossible to short, but going long now would be similarly doomed. So short at the next break under the 200 day MA, and watch as the market collapses.
