The Dow fell as far as it could possibly do without reversing the trend on a long-term basis even technically. The low this week has been 15370.33. This has flirted with our Third Monthly Bearish Reversal at 15550, but we have also a simple technical point of great importance – 15284. That happens to be last year’s low. Penetrating that number would open the door to a slide into March of 2016.
Consequently, penetrating this week’s low will be INCREDIBLY significant for it would set the stage for 2016 being an OUTSIDE REVERSAL TO THE UPSIDE and that would be just about the worse type of PANIC you could possibly create. WHY? Because this would imply a total meltdown in government and the rush of assets from government paper to private assets would be like a building on fire with all the doors locked except one.
