“Nothing goes to hell in a straight line, not even stocks.” This time-tested piece of wisdom comes from Wolf Richter, editor of Wolf Street, by way of a headline on his blog. Richter is one of the more astute commentators on the financial scene, and his observation has obvious implications for a stock-market decline that is starting to seem relentless, particularly for investors who have chosen to ride it out.  So when will it reverse, wreaking vengeance on by-now giddy bears? Richter sees this happening early in 2019, when the tax selling that has intensified the market’s weakness in recent weeks abates. He notes, however, that the plunge so far looks relatively modest when viewed against the epic rise of stocks since 2009.  You can see this graphically in the chart above.

AAPL Due for an Upturn

It colors my own outlook as well, as it may yours, because of the enormous amount of wide-open space beneath current levels. Indeed, the index has a great deal of room to fall before it might be expected it to pick up ‘structural’ support from a low near 1800 recorded early in 2016. That would equate to a drop of 39% from September’s high of 2940. If the S&Ps were subsequently to rally and then fall anew, perhaps to  sub-1500 levels, it would not contradict Richter’s observation about the path to hell; rather, it would simply stretch the popular imagination concerning how deep hell may lie.

My technical outlook somewhat complicates the picture because I have weighted AAPL above all other stocks. It plummeted 15 points last week, to a low that fell an inch from the 150.63 target I’d sent out to subscribers before the move. This number is a ‘Hidden Pivot support’ — one sufficiently compelling to imply that a tradeable bounce from exactly this level is likely. If so, given that AAPL is the second most valuable stock in the world behind MSFT, the broad averages are almost certain to rally along with it. This scenario is not chiseled in stone, however. Although the ‘hidden’ support can be expected to work, if instead it is overwhelmed, that would suggest sellers are not yet finished. The next southbound stop would be 144.82, a Hidden Pivot that possesses the same telltale quality. If it fails as support, look out below! AAPL at $100 a share? No one who has experienced a bear market would deny this is possible. We should remain prepared for it in any event.