Even though corporate earnings reports posted lots of good news last week and this, the market fell again and again along the relentless downward trend line…It's not hard to see that each bounce up has become weaker than the bounce before. What happens when the collapsing ceiling and the floor meet? If the market breaks through that floor, typically the floor collapses. From there, it now has a long way to fall without any obvious support. In my view, its a fall that eventually leads back to the bottom of the Great Recession and maybe even further.

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As you can see below, the Dow has now broken below its 50-day moving average, its 100-day moving average and its 150-day moving average:

There is not much floor left. What used to be support beneath the market has become the ceiling. The market has inverted [and, as the chart below so clearly shows,] is now sitting right on its 200-day moving average…[and,] when stocks fall below their 200-day trend, the market is generally considered to have made a change in trend.

As Investopedia conveys: "The 200-day SMA…is commonly used in stock trading to determine the general market trend. As long as a stock's price remains above the 200 SMA on the daily time frame, the stock is generally considered to be in an overall uptrend. It is possible there is also something of a self-fulfilling prophecy aspect to the 200 SMA; markets react strongly in relation to it partially just because so many traders and analysts attach so much importance to it."

While I have not based any of my predictions on charts, the above chart reinforces what I've said would happen this year because many investors do put emphasis on charts…Breaking through the 200-day average on the way down with no clear support below is a frightening sign to many investors to which they may respond as frightened people often do - in a panic - so we are now perfectly poised to see where this market is going from this point forward.

It has become common now to read that the closest economic comparison to our own time is found in the Great Recession, and this retreat to Great Recession milestones in the U.S. stock market is happening just as the market enters what has typically been the weak half of the year for stocks (May ? Oct.). That doesn't give a lot of hope that things are going to return to any upward trend, especially when stocks keep dropping in the face of generally positive-sounding corporate reports.

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