This is an update to my two blog posts of January 9, q.v.  In the first post, I recognized the important breakout above that critical resistance curve, and opined that this indicated that we’re not going to repeat the behavior of 1930,  Then, I said, “Even if price retraces below the resistance curve, I’ll still consider this a valid breakout as long as price remains above the closest-in support curve, the green one shown here.”  Well, this past week, price did break down through this support curve, as shown in the chart here, an expanded view of the Jan. 9th chart.

In my 2nd Jan. 9th post, with monthly bars chart, I said, “. . . (price) is now up against the primary resistance curve.  If it continues above this level (1150), and I think it will . . .”.  Well, it did not go above that resistance curve, instead breaking down as noted above.

The new chart here is weekly bars, starting in Feb. ‘09.  I’ve put in the standard Midas hierarchy of support curves, S1 through S3, launched from the pullbacks.  A basic principal of the Midas methodology is that once price breaks down through the latest S curve, that indicates that the trend is over.  So, at this point, on this weekly bars timeframe, I’m concluding that this uptrend from March of 09 has ended.  It’s interesting to note that simple old trendline analysis, the light gray straight line, confirms this conclusion.

The break above the calibrated R curve didn’t go far, and didn’t last long.  I’m now coming around to the opinion that the market probably is following the script of 1930.  See the first chart of my Nov. 20 ‘09 post.  If so, we could well be at the beginning of a major new long term bear market that will take us far below last March’s low.

Next, I’m going to update the monthly bars chart, and also provide a look at the accumulation/distribution behavior that’s behind the recent breakdown.

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