In times of intense short-term moves and I would think this past week qualifies, it's good to step back and take a look at the bigger picture i.e. a longer time frame. So let's consider the monthly chart for the S&P 500 index since 1998 shown above (click to enlarge).A few things jump out:
1. The double-top, obviously.
2. The sheer velocity and ferociousness of the selling that make the 2000-2002 bear market seem gentle in comparison. The selling we've witnessed the past 2 months is equivalent to 2 years of selling then (2001 and 2002). The 14-month RSI, a good measure of selling momentum, has plunged from overbought to oversold a lot faster than 7 years ago and is more oversold now than at any moment then.
3. All Fibonacci retracement levels were blown through as if the Italian mathematician had never existed. The last stand, a full retracement to 768 is so tantalizingly close and the downside momentum so strong that we might break it without even noticing.
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