In this weekend's 329th edition of Turning Points we have an 18 page note going over the developing top from 4200 on the S&P along with the introduction of two new short positions to add to our Aggressive Bear Portfolio that capitalize on emerging bearish trends in the markets.
What follows is an excerpt from this weekend's note.
MARKET UPDATE
This 329th Edition of Turning Points is going to be extensive. I have a lot of charts to share as there are significant shifts taking place in the markets that have some very real consequences for investors during the weeks and months ahead.
I don't necessarily enjoy being an alarmist. Those of you who have been reading my work for a number of years know that this is the first time I have struck such a bearish chord in well over a decade.
I'm a perennial bull. In 2011-2012, I was writing about how investors were significantly underestimating the upside in the markets, discussing a bullish super cycle (Google: Zeonolytics Supercycle) taking place during the decade ahead.
I viewed every dip as a buy. I dismissed every bearish argument all the way up.
My bullish persistence was primarily rooted in my technical work of the markets. During the entirety of the uptrend, including the 2020 pandemic crash, the 2018 taper tantrum and so on, there was nothing that concerned me technically beyond what I viewed as temporary interruptions in the uptrend that investors inherently overreact to each and every time.
What I am seeing as we are still early in 2023 is different, however.
In recent editions of TP, I have highlighted the fact that the market are undergoing distribution on a scale that we haven't seen for the entirety of the bull market, off the 2009 credit crisis lows.
As I highlighted in the 328th Edition of TP from February 19th, the chart of the S&P 500 strongly suggests that the entirety of the consolidation from April 2022 until now is simply one giant distribution pattern prior to the next leg down.
If this analysis turns out to be correct, then the next leg down will be the most substantial selling event of this bear market.
You don't break a nearly year long distribution pattern gently. When it breaks, it is a violent, persistent and generally, ugly event.
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