[pcabc]

I read SA some time after the 2009 bottom and since then, I don't recall the Chapter 8 indicators being so decidedly negative.  Looks like nearly all boxes are checked and it's time to tighten things up and look for shorts.  The MI has not crossed 0 yet but is headed there and has a strong divergence.  The Dow feels like its about to fall off a cliff, if it already hasn't.

Not seeing any panic yet, so think that might start to set in and we could get the flush for a short term bottom, and then a volatile relief rally, before the market makes any firm decisions on the general trend direction it wants to take. Personally, I've been waiting for this for ages, as the best time to buy is always when all the time scales of the market breadth indicators are recovering from the bottom zones, which they are only just reaching, and that generally only happens once every 2 or 3 years or so. So I'm going to be watching the breadth closely, but doubt I'll be doing any shorting personally, as I've never been able to well. So if start saying I'm going to then that's definitely a sign that it's a bottom!

One of the challenges I find myself, is should you buy on such a recovery when the market breadth is showing full strength or when it starts to show signs of recovery?  With the former you'll likely only get the full strength noted when, say 50%, of stocks are in stage 2, which implies you'll miss the strongest.  However, getting in too early when breadth is strengthening risks a false dawn.