Commentary for January 18, 2008

| January 18, 2008

The sharp decline in the S&P 500 this week has taken the index well below a key uptrend support level, and it has now become likely that the next cyclical downtrend in the secular bear market from 2000 has begun.

The cyclical uptrend from early 2003 accelerated into a speculative blow-off move in late 2006 before struggling near all-time highs throughout most of 2007. In November of last year, the S&P 500 broke below power uptrend support at the lower boundary of the blow-off rally, and this month stocks are in danger of breaking below long-term uptrend support in the 1,400 area. A monthly close at current levels or lower would confirm the breakdown and signal the highly likely start of the next major move down of the secular bear, so watch stocks closely for the rest of the month.

Category: Commentary, Market Update

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