This is what we were looking for

It's hard to imagine the market recovering from this, it can be done, but hard to imagine.

When our December 14th forecast was looking for a move above the IWM's 6 week range, it wasn't a bullish event that was occurring although it looked that way as it happened, it was a bull trap being set that would give the market the same downside momentum as the break below the range on December 15th and 16th did for the upside momentum on the 17th and after, except for one thing and that's that markets fall faster than they rise.

While I'm not making any changes to the current analysis and we're in good position either way, I do want to demonstrate that this is what we were looking for to happen, once the bull trap was set, all that needed to happen was for their stops placed on the breakout above the range (IWM on 12/18) to be hit, then downside momentum picks up at a rapid clip. This was a head fake move that we anticipate just before a transition from the October cycle's stage 3 top to stage 4 decline.

IWM daily will pick up more downside momentum below the range.

And the major averages including transports have now almost erased all F_O_M_C knee-jerk gains. Everything has worked near flawlessly so far from the head fake, Crazy Ivan, the Santa Claus rally FAIL and now it appears the January Effect FAIL.