Which NASDAQ trendline will prevail?

You know I believe the downward trend will finally prevail.

Eno, Clarkson, & an Aston Martin

The Magazine Cover Indicator Strikes Asia

As I write this, the Asian markets have continued to fall.

Bearish Projections Come Out of Hibernation

A few weeks back, I wrote that the market was incredibly overbought. Well, that was back when the S&P closed at 954.58. The market continued to surge higher and get even more overbought as it surged past 1000, tagging 1015 last Friday.

The market's downward action this week has worked off some of that overbought condition, and some tremendously bearish near-term projections have come out of hibernation.

The first one appeared in a Marketwatch headline from earlier today:

But one market technician believes trading volume in recent days on the S&P 500 Index is a sign that the broad market gauge will test last month's lows, then likely fall under its March low either next month or in October.

The decline in volume started on Friday and suggests the S&P 500 will make a new low beneath its July 8 bottom of 869.32, probably next week -- on the way to a test during September or October of its March 6 intraday low of 666.79, said Tony Cherniawski, chief investment officer at the Practical Investor LLC, a financial advisory firm.

"In a normal breakout you get rising volume. In this case, we had rising volume for a while; then it really dropped off last week," said Cherniawski, who ascribes the recent rise in equities to "a huge short-covering rally."

The S&P has rallied more than 50% from its March lows, briefly slipping in late June and early July.

Friday's rise on the S&P 500 to a new yearly high was not echoed on the Nasdaq Composite Index, bringing more fodder to the bearish side, according to Cherniawski. "Whenever you have tops not confirmed by another major index, that's another sign something fishy is going on."

The second bearish projection appeared in the comments at Slope of Hope. The chart drew my eye, and soon enough, the host of Slope of Hope featured it in its own post. Here's SoH commenter Virginia Jim's handywork:

Rural Alberta Advantage

The Rural Alberta Advantage first caught my ear while listening to the weekly CBC Radio 3 podcast. This three-piece from Toronto?!? has a catchy lo-fi pop sound that you may find enjoyable, so here are three examples of their work: