SPY fracturing; Mamis roadmap intact

SPY has had, as Eric said, a lot of technical damage today with some major trend lines being broken.

I am beginning to see how a "renewed belief in negatives" can take this thing over. There is a lot of black space to fall into with next support at 88-ish (sorry for the horizontal line.)

Low volume = complacency. And the next trade for many is to take some profits and I doubt many bulls will try to defend this beast once the noise machine starts up about increased regulation, poor consumer spending, increased savings rate and political unrest overseas.

The dollar is relatively oversold here and may make a bull run with any anxiety. TLT likewise is oversold. Most equity classes and commodities are overbought. You do the math.

Now, let's look at the updated Mamis roadmap of the SPY, with targets all intact.

Mamis Bottom: 2002 -03 Vs. Now

Justin Mamis looked at the technical  and sentiment analysis of market bottoms.  Let's see where we are now and project into summer.

SPY 2002 -03 market bottom shows a similar pattern with Point C bottom on Oct 02 and Point E Aversion in March 03 (approximately 5 months to the test of the low) before positive market movement takes over.

Where are we now?  If we follow Mamis' lead and assume this market bottom will look like Mamis' model and the 2002 -03 chart, we can draw in some projections.  Point C "Maximum Information Risk, Minimum Price Risk" indicates the March 9th bottom of 666.

We should be approaching Point D "Denial" soon.  My projection calls for a pullback this summer as Point DD "Renewed Belief in Negatives" dominates.  In 2002 -03 the re-test of lows occurred approximately 5 months from the bottom, so that would bring us to August 09 with Point E "Aversion".

Sentiment now is very positive with money managers feeling behind the ball on this rally.  The NFP today is being met with buying... which could be viewed as denial of the magnitude of the problems we are facing in the economy.