I’ve got no idea why pundits continued to describe the week’s more dramatic oscillations, and Wednesday’s comparatively milder choppiness, as just an impossible to comprehend forest of uncertainty.

It’s not. The behavior all week is quite clear; and beyond simply an effort to ‘hold the line’ around (slightly above or below) June S&P 2600 levels. I note that it also coincides with the 200-Day Moving Average, hence very specifically is an effort to make this bouncing affair a ‘secondary test’ of the indicated February double-bottom, also right at the 200-Day Moving Average.

You may recall I thought it was a ‘last ditch’ stance and right at that level, not only because it was the 200-DMA, but also as it was peak-to-trough right at a 10% decline for the S&P. Get more than that and the leveraged crowd would be hard-pressed to recovery.

That’s why I called for an ‘automatic rally’ at the time; but only for trading, not for investing. Why? Because I thought there was nothing attractive in terms of forward prospects to justify more than trading moves into Spring at best, and then we’d see new troubles.

We did abort the move roughly as outlined (rough because even that fought for several weeks around or shy of S&P 2800 (the cap we thought any up-move would have), and for the most part oscillated around S&P 2750, which I termed as inflection.

Then we got the more recent break as I described with a symmetrical or similar pattern breakdown (followed by false rebounds); and now we’re at the secondary test lows; which in theory are not holding together well.

Bottom line:  there is no change in our overall assessment. Whether we get a breakdown tomorrow (last day of the Quarter and most leave early for both Passover and Easter holiday observations), or they drag it out a big longer, we suspect the risk is increasingly significant for a break to a lower level.

Probably some algorithmic after-the-fact signals would also be generated by such a move (and as the lateral low of 2550 or so comes out later on) hence one has to be prepared for at least the possibility of more drama.