Ursus Americanus: this time it's for real

As I indicated in a previous post, a decisive break of the August lows was a necessary condition for a bear market prognosis. The line in the sand was a nice round number, 12,500 for the Dow. We needed: a clean break, on a daily close basis, on high volume. What happened today, as shown in the chart above (click to enlarge), fully qualifies...in spades and I'm trying to stay calm and understated here.
The next logical support for the Dow would be around another nice round number, 12,000, right above the March 14, 2007 low, established after the nasty February 2007 spill. Does anybody remember that one? It seems so long ago now and yet it was a harbinger of things to come. But I digress.
Guess what? We're already two thirds of the way to support. That's what's called the path of least resistance: why do in a week what you can do in a day? But Dow 12,000 can be but a quick stop on the way down. I'm not much for patterns but that Head and Shoulder pattern on the chart above is literally jumping out of the monitor. A quick calculation gives us a target of around 10,500. Like the title says, this time, it's for real.

P.S. I feel compelled to add a cautionary note here, lest I come across as overly bearish. What happened today is undeniably very bearish but the market, as we all know, has a way of behaving in the strangest and most unexpected manner. And now, after a huge down day on huge volume and with the VIX exploding 17%, would be a great time to catch many traders wrong-footed. So watch out for those nasty bear market rallies, they can be stronger than those of the bovine variety.