What I see for the S+P

The S+P just hit the top resistance line and bounced down.  At the same time, many companies that are closely tied to the economy (like Wal-Mart) are warning.  What I see is shown in the following model.  First the chart goes back down to test support at lower resistance.  If that support holds then it leads to a nice bounce to somewhere around mid channel before losing steam again. That would be waves 1 down and 2 up of the new downtrend in the S+P 500 (i.e. the bear market has started).

With 1 and 2 out of the way, the next move down would be a 3rd wave and after so many months of Bernanke-Bux driven market gains I'm sure the "panic" out of stocks will be a doozie.  I think it will take the power of a 3rd wave to break the S+P down as shown given so many months of successfully testing that support.

Today is Aug 16, 2013.  The markets will look very different a year from now IMO and American stock market complacency will have turned into despair.  If you are a boomer, you might want to consider an exit stage left before the con men pull the plug on this Ponzi.  Always JMVHO and very speculative at this point.  But I have seen this pattern playing out time and again at smaller scales so I think it is worth watching.

As usual, all calls have to have triggers for rethinking and I think a break out of the top resistance line would be cause for a re-think on this call.  Likewise, confirmation should have triggers and I think a break below the lower channel will be confirmation of the new bear market for equities.