This is not conditions that are good for a turnaround and instead, along with the horrible economic data coming out, is conditions good for a market that could easily lose another 20% to even 50%.
I know this is horrible to think but some of you are very smart and understand charts. I am not speaking to those that read this and do not understand what I am talking about. While I want to help them and would love to as they should see via my returns in shorts like GGB 68% ARB 65% CEDC 61% SBAC 61% SPG 51% SPW 73% CYT 63% POT 60% SDA 77% CETV 86% APD 50% RIMM 54% MOS 66% ATHR 53% TITN 54% CEO 47% AMX 47% CPRT 28% ENB 18% PLCE 35% IPHS 35% CAJ 37% LLL 30% RDK 16% OKE 38% PAA 18% AAPL 46%, I can not force them to listen to me if they are biased to buying bargains. My returns speak for themselves and if you review my best longs from 1999-early 2008 you can see using this methodology (at least learning this methodology; not necessarily listening to me) that you can make a TON of money on the long side and a LOT of money to the short side.
Now getting back to an important technical pattern I want you all to look at, I just want you to take a look at a quarterly chart of the Nasdaq. This chart will be very disturbing to look at for those that understand how important accumulation and distribution is. But we must look at it to prepare ourselves for the worst case scenario. All the while being prepared by watching stocks like COGT for a possible bull market. However, this chart paints a very ominous picture and it is clearly noticeable to good technicians after an immediate glance.
In case you are not good enough to see the disturbing situation let me try to describe it for you. While the market rallied all throughout the nineties you can see that as each quarter came and went the market would work its way higher on stronger and stronger volume. If it did have a down quarter it was on lower volume 5! of the 7 quarters the market actually pulled back from late 1990-2000.
Since the end of 1999, however, we have the almost opposite and an even more disturbing situation. Since the start of the new century the market started off down 10 of the first 13 quarters. Not only was it down but it was down on very heavy volume nine of the ten times. After five of six quarters of rallying, during a time the market was in an uptrend, the market managed to have four out of five down quarters yet the market still made slight progress. Three of the four down quarters had heavy volume and was much heavier than the one up week yet bulls overall held.
Right after that, there were six of eight quarters higher but the two quarters in the middle had very heavy distribution compared to the six quarters of the rally. After that, the Nasdaq had five quarters of flat to slightly down price action. During those five quarters, three of them showed very heavy distribution on slight down days.
