A technical roadmap of the current landscape

Consider that for a true bull market to emerge, the S&P needs to clear its 200-day moving average. Yet even a casual glance at the chart above [in article] points to a serious problem. Namely, the S&P currently holds more than 300 points under its 200-day, or fully 43% lower.

Looking ahead, the solution to this problem won't be that the S&P rallies to meet the 200-day, but rather, the 200-day needs to drop to meet the index. Based on a rough back-of-the-envelope estimate, this rendezvous is at least five months off.

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The Dow and the S&P have already edged under the 2002 lows, market sentiment is unusually complacent, and the traditional leadership groups remain technically wounded.

That means capital preservation remains the first objective -- and while trading rallies will emerge -- further technical repairs are needed before reconsidering a near-term bounce.

from A technical roadmap of the current landscape.

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As I have said before, for those astute investors with a bit of time to look after their own investments the single most valuable long-term indicator is the 200-day moving average. There are no signs that any stockmarket is going to suddenly lift off and breach this indicator. Whatever the froth in the financial news, wait for that 200DMA to slowly drop. I mean, at the moment even the 50DMA is dropping so there is much more sense going short than long.

One interesting this is that the last two drops this year have not seen the VIX rise anywhere near what we saw last year, peaking in the 50s rather than the high 80s. The author suggests this is a sign of complacency and that the last lingering bulls have not yet been throttled out of the market.