The following is the opening, introductory segment from this week's edition of Notes From the Rabbit Hole. After setting these general ground rules for swing trading this market, NFTRH 378 clearly illustrated the US market from several different technical, leadership, market indicator and sentiment angles. We also thoroughly updated global markets, currencies and explicitly broke down the gold sector to be clear on what will be in place technically, sector-fundamentally and macro-fundamentally when a real bottom is achieved for this counter-cyclical sector.

We began 2015 managing declining market momentum, continued into the summer as the S&P 500 went sideways with a downward bias as momentum eased further, nailed the downs and ups of the August-September bottoming process, projected a big relief spike upward based on unustainable bearish sentiment (at key support), projected a return to bearishness (although a grind at worst, into year-end) and here we are in early 2016, when a resumed bear phase was likely.

What I had hoped for has come about. The stock market's intermediate trend changed when, using the S&P 500 as an example, the key short-term support at 2000 was lost. I had thought the market might try to bounce there but the impulsiveness of this bearish surge cracked it right down to an even more important support level. That is the October 2014/August 2015 lows that we have often noted.

The market is in an intermediate bearish trend but a bear market for the S&P 500 would only be indicated with a failure here. We are already in a ‘stealth' bear market by other lesser watched indexes. But the venerable S&P (and Dow and NDX) are still clinging to key big picture support. If the bulls have something up their sleeve they'd better pull it out and throw it on the table right now.

Regardless, we are now in a market swing regimen within a bear trend. Amen to that.

During the bull market you could surely put on shorts but longs worked better because they were going with, not against the tide. Today we flip that script over and realize that the market's thrust is down in the current phase. Next week is going to be interesting because now there is no more wiggle room. It is either bounce or enter a bear market that everyone (media front and center) will be aware of.

So whereas NFTRH+ focused more on longs through 2015*, we now have a green light to focus on shorts (the brutally bearish Goldman Sachs chart being a prime example) as the primary mode. I won't tend to display longs unless they are a special situation, like the counter-cyclical gold miners putting in a bottom that looks sustainable or as we did last week, a risk 'off' vehicle like long-term Treasury Bond fund TLT.

But as noted last week, I longed the SPY personally to see if I can't get a bounce out of it. This is well protected with shorts against GS and Emerging Markets and it is a counter-trend bounce position only. A better trade would come if we can bounce this market to the equivalent of SPX 2000 (+/-) and pending current information (sentiment, policy, macro data, etc.) at the time, get short this market for perhaps as low as the 1550 level on the S&P 500 if a cyclical bear market ensues with an eventual loss of today's levels.

* Given the market's extended waning of momentum, these were not as fruitful in 2015 as they would have been in an earlier, more robust bull market phase.

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