http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p83257770514&a=266398464

The feb trendline and the apr trendline are well broken and we are seeing the consequence of that.  What we are not seeing yet is the impact of breaking the nov 12 trendline.  We might see it shortly as the trendline is only 10 points away.  The major trendline lurking off the chart is the mar 09 trendline — 100 points away.  Needlesss to say there would be hell to pay if that line were broken, but we consider it extremely unlikely.

Paying the inferno for the nov 12 line would be painful enough.  Some of our accounts are hedged, some are not.  Readers who whistle past the graveyard and just grin and bear it will probably come out of this better than those (like ourselves) who run around like chickens with their heads cut off trying to hedge.

This downwave is by no means done and if possible we will indicate when it’s prudent to buy, as this will be a buying opportunity, and this bull market is by no means done.

Shortly some technical comments on the likely range of the downwave.