As I said on Friday, the fact that a market inverts does NOT change the original forecast, eliminate downside targets, or raise them (according to the BAM model.)  In fact, what it does–according to my model–is create a situation in which the market is temporarily “wrong” in its direction as it levitates above an air-pocket–composed of the original advance or decline (which was supposed to have unfolded) PLUS the new advance or decline created by the inversion.  Using Friday as an example, the 119 pt advance will be unwound on a GAP (as we open this morning) and THEN we need to see them fall further in order to “make up for” the original decline.

Also, if you see the market stray from the model’s forecast, the model is instructing us to “fade the market” in expectation that, once the decline unfolds, it will make up for all past stubborness as the market experiences either a mini-crash or a full-blown crash.

As a reminder, I’m also expecting that “severe” decline in Crude Oil and that might fit the potential idea of a flight restriction/transportation scare related to this flu outbreak.

Full report coming soon