Tom DeMark, CEO of Market Studies, expects an 11.2-16.8% decline from here on the S&P. He created the DeMark Indicators which measure trend exhaustion. DeMark said the daily, weekly and monthly time series all recorded a "13", which he believes confirms a "major turning point" for the market.
He was on CNBC on 1/26/2011 predicting an 11% decline, but the unanticipated crisis in North Africa rebalanced the downside force. Only the daily and weekly time series had a 13 at that time. For technical confirmation, DeMark needed to see the March S&P Future close below 1326.30 ✓ and make a lower low tomorrow (today).
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| Source: CNBC |
If you just look at the chart of the S&P, it looks like it could break through that uptrend from August 2010 and test the trend line from March 2009 (and the pre-flash crash high). I put up a weekly chart below. The 50 week moving average (1171.58) is testing the 200 week MA (1179.53). SPX cash closed at 1315.
$SPX (S&P 500) - source: stockcharts.com
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