We have closed below the 200 day MA for 3 days in a row and the 200 day MA is starting to flatten. The 20 day MA has convincingly moved under the 50 day MA and the 50 day MA is turning down. But the biggest inicator that the is a bear market move with staying power is that we broke the Feb lows on a number of indices (S&P 500, NYSE Composite, Dow Industrials). This is now a major lower low.
Internals are very bearish, the down breadth (participation) is extreme. Down volume is very large (*much* larger than up volume), and all accumulation/distribution indicators are showing decided and convincing distribution.
There will be rallies to be sure. And some of them will be impressive. But like I was pointing out before: What type of markets do 4% up days happen in? - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=389185, we get the most spectacular rallies as reactions within bear markets. And I now believe these peaks will be shorting, just as in opposition the last year and a half all the dips were bought.
I know nobody wants to listen to me. After all, I have been the "boy who cried 'bear'" for so long. But I have always maintained that this rally was nothing more than a very large bear market rally. And that eventually the bear market would resume. If anybody is interested, here is my updated Longer Term Projection - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=388503 that I provided a few weeks ago.
I woud encourage everybody to think defensively and to reduce risk exposure: A look at an old friend: Risk - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=392209. Good luck to all.