The bears are finally getting their correction, well kind of, sort of. For the those permanent members of the Ursa Major clan, the scratch barely more than 4.00% as of Wednesday night hasn't been much consolation considering the fifty-plus percent run from the March lows. In the bears' defense though, could this actually be the start of some actual doggish "ruff" and tumble payback after nearly six months?

As a technician that does keep those classic charting patterns in mind, it wasn't that long ago that I liked the prospects for upside in the S&P500 (SPY) out of an inverse Head & Shoulder pattern on the weekly perspective. However, as a more conscience and generally nimble-minded trader that's willing to switch sides when the tides turn, the odds do appear to favor a larger correction before and if, the bulls might have a shot at resuming the inverse H & S pattern's trend higher.

Is it a bearish weekly "W" in the making? I'm referring to what might be taking shape on the intermediate time frame in the SPY. Some bulls may still be infatuated with the former and more optimistic view provided by the inverse H & S. In theory, based on its measured move that pattern still has significant upside (113 - 120) left in it before it completes. However and as seen below, a turning point within a "W" does look to make sense and possibly "cents" in the here and now for bears and (cautious) bulls.

Figure 1: S&P500 (SPY) Weekly "W" Mid Pivot (The Turn)

Looking above to the weekly and the immediate technical picture does seem to suggest the potential for a "W" and bearish turn at the "mid pivot." Whether that large basing pattern actually comes into fruition by retesting or coming close to the March lows, is another matter entirely, well, for this strategist. What I can say or see is that after forging confirming a weekly (reversal) doji high candlestick-the market looks due for further testing within a counter-trend pullback from the March lows.

Did someone say "March lows" again? It's hard not to have some type of cognitive anchor to what's occurred since that time. It has been a historic run and even the strongest of strong rallies, do provide counter-trend opportunities. In of itself, that might be enough for investors to continue on their current but thus far, short-lived business of "profit-taking."

Additionally, where the market has managed to climb back to on a Fibonacci (just above 38%) basis and with too many CNBC Breaking News flash "Market At Pre-Lehman Levels" teasers-I personally can't help but to be on guard for some further "red chutes" instead of those green shoots bulls have been feeding on for so long.

Finally, throw in the market's most historically lethal bull-dozing months of September and October, a VIX which still hasn't stretched to levels on a short-term basis worthy of hearing the bulls cry "No mas!"-and at a minimum, preparing the portfolio for more than just a "schnitzel" below the coveted 1000 level, is thought some appropriate food for thought.

Chris Tyler
Senior Staff Writer & Options Strategist
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The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.