BY FRANK BARBERA, CMT

Definition:

a. The act or process of failing to function or continue.

b. A typically sudden collapse.

Well, today’s action and the action of 2008 so far rates as a Breakdown, and very likely a Breakdown for the Ages. Over the last few months, we have consistently been pointing to the huge topping process taking place on the S&P 500 with the idea of alerting readers to the high risk contained within the stock market. How could it be that the banking system of the United States, and indeed a good chunk of the Western World is literally brought to its knees by a bad debt problem, and the S&P would manage to hold up with no collateral damage? Does this thought process really make sense? Certainly not from our point of view. Instead, we have continued to monitor what has been a steadily building distribution top in the S&P and a host of other global indices, with the results leading into the serious downside breakdown below key support at 1410 on the S&P seen today. Going back to our December 2007 article, “The End of Denial,” we pointed out that there would be plenty of sucker rallies along the way as the market started its inexorable slide. We stated,
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