What's the s&p gonna do now that it's (essentially) in official bear territory?

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Below is an extract from IM conversation which took place yesterday night with my trading buddy
Quoted:
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"DavidDT (7/1/2008 10:17:27 PM): the more I think about today, the more I browse financial sites, the more uncomfortable I became with the whole notion of "establishing the bottom" today. too many cheering, downtrending channel continues, SPY still closed outside of acc channel ( by a notch, but still) - I think "someone" is going to get whacked tomorrow
DavidDT (7/1/2008 11:16:28 PM): Also, as I look not at the volume, but dollar weighted volume - today's volume is 60-70% of prior reversals volume [- not good enough for reversal]
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And guess what? I totally ignored my own analysis and stayed long QQQQ calls and added a lot of XLF calls. NO. IT. DOES. NOT. FEEL. GOOD. AT. ALL.

That been said...I think tomorrow $VIX will spike on open ( Jobs report, Triches ECB action - I don't care...) Selloff will follow ... and that will signify short term bottom.
Plus, looking at after hours QQQQ action attributed to NVDA fiasco ( surprise, surprise - is it?), last price is somewhere at $44.50 and that price fits perfectly into symmetrical triangle from New Year up until now, plus QQQQ is sitting on volume support...

In short... if QQQQ will hold $44+ tomorrow, we'll see that "second week of July rally" I was expecting.
Not to overlook that today's action in oil with vicious short covering in the last 10 minutes due to 6% margin requirement been raised looks really "toppy" to me...
( reminder: Morgan Stanley said: " Oil will be $150 by July 4th" - read: "get the hell out before 4th of July")

IF, which I think, is HIGHLY unlikely, QQQQ will break $44 area on downside...oh well...let's think positive...I am not even looking at market tomorrow, low volume, high volatility, I had enough of that for this week - will get "the news" on Monday.

Happy 4th of July ( kind of lost some significance due to " a lot of taxation and no representation" recently )

Don't keep your eyes in the line of firing of fireworks - well, if you are grown up and dumb enough to do that - then...good luck.

Queston:  What's the s&p gonna do now that it's (essentially) in official bear territory?

Answer:  Go down more! 

The S&P broke through the 200 day moving average last year. So it has been in bear territory for quite a while. Target 700 area. http://badgerthelion.blogspot.com/2008/06/70s-dj-vu.html

im using a 20% downturn from closing high as my bear territory definition....

interesting that coal absolutely rolled over, and energy was weak as well. I dont put TOO much stock into these new developments because of the short week-lots of folks on vacation already or sold out today and started their vacation early.... 

Most people use moving averages. I have heard that said recently by the talking heads on TV. I will stay with the moving average. One thing about a bear market is we have stronger rallies as well as downturns. The signals change too. What worked in a bull market sometimes is the opposite in a bear market. I agree with you on the vacation thing. Wall street is not going to reward those that will not hold while on vacation. Expect a rally after the weekend. Wonder what excuse they will feed the media.

With everyone seemingly making this an easy call at a short term bottom, it makes me wary of how "easy" it is. Perhaps we aren't going to get a bounce? :P

locogmac - it was Tuesday you are talking about - back that night "talking heads" started to call a bottom. Now those hopeful got whacked - not an easy bottom :-)

Well, it is 12:35AM July 8th, second week of July and tomorrow at 11AM comes promised bounce :-)

Boy, this party really died - may be I have to start posting again :-))