In this post, we're going to recap our views from the last two months, discuss our current market view, and outline what conditions need to present themselves for us to be aggressively buying stocks.

First, let's recap our posts from the last few months that outlined why we were taking a more defensive approach towards stocks.

Are you noticing the relative strength in Emerging Markets? That is NOT something we would expect to see if the world was actually coming to an end.

I can't stress this enough, stay away from the glorified gossip columns. They know less than nothing. You know who knows? The market. So that's where we'll get our data.

Think about it like this, there are more people and firms with more money and better intelligence than any of these governments, communist or otherwise. Are you actually going to trust the propaganda being put out in the "news"?

Or do you trust the people putting actual money behind the information they're spending a fortune to get? When we want to know what's really going on, we turn to the markets. The rest is pure junk.

For now, we're in an environment where we want to be buying stocks. We want to be incredibly disciplined with our risk levels, probably more than usual, but buying stocks nonetheless.

We've been running scans for stocks putting in bullish momentum divergences, or better, not getting ...

We're buying a few Chinese Internet Stocks. If the world isn't ending after all, this could be an interesting place to look for huge winners. I'm already seeing relative strength there.

Our first downside objectives in the major indices have been met, so we're back on the lookout for long ideas.

One stock that has caught our attention is IndoStar Capital Finance Ltd.

We've been pointing to weakness in Indian equities, and equities around the globe, since mid-January. Last week the global leader, United States equities, joined the correction party and quickly met our downside targets.

We've since flipped long US stocks and are now playing for a bounce.

Patience has paid in Indian stocks, so here's a quick update on our view now that our first downside objectives have been hit in the major indices.

From the desk of Tom Bruni @BruniCharting

Today JC discussed our March playbook for Members and outlined some areas we'd be looking for a bounce with well-defined risk and others that we want to be completely avoiding.

I wanted to share a few breadth measures to provide context around the recent decline and see if they offer any clues around what's next.

Stocks got hit nicely this week and we did very well in our bond positions. So where do we profit next?

From the desk of Steve Strazza @Sstrazza

Thank you to everyone who responded to this week’s mystery chart.

We had mostly "do nothing" responses again this week but buyers or potential buyers came in close second, many of which said they were waiting for confirmation of the momentum divergence and failed breakdown before taking action.

We only had a few sellers, which is interesting because that's the camp we'd fall into as long as prices remain below support.

One of the main reasons for our bearish bias towards this chart is the fact that it's been in a long-term downtrend and consolidations tend to resolve themselves in the direction of the underlying trend.

We've been very clear about how we wanted to avoid owning stocks this month. Fortunately, bonds have been the beneficiaries of the relentless selling in these stocks. Nothing has changed for the positive. But it's actually some former leaders completely falling apart that now has my attention.

Remember when Industrials broke out to new all-time highs? We said that as long as that was the case, how bad could things be? Well, Industrials are no longer above those former highs and actually just broke down to new 10-year relative lows. This is behavior consistent with an environment where we want to be selling stocks, not buying them:

Larry McDonald is the guy I turn to when I want to talk about the Bond Market. He always has something insightful about what's happening that I'm probably not seeing. We've become friends over the years but I originally got to know who Larry was by reading his book, Colossal Failure of Common Sense. This is a book about the collapse of Lehman Brothers being told by a bond trader inside the firm. I encourage you to pick it up and give it a read. It will give you good insight as to what exactly was taking place at the time. In this podcast Larry tells us a good story about the day his team had the most profitable day in the history of the bond desk at Lehman and Dick Fuld didn't even bother to come down and say hi.

The market today is different than it was in 2019. What's going on in the bond market is playing a huge role. I couldn't think of a better time that the present to bring in my friend Larry McDonald to discuss what we're...

The risks associated with owning stocks are currently elevated.

There are a lot of things I can say, levels I can point out, possible outcomes I can walk you through, all those things. But the one common denominator between all of those is that the risk in owning stocks is currently higher than it normally is.

This is an important time to remember your original investment objectives, time horizon and risk parameters. Before buying a stock, or entering any investment for that matter, these 3 questions need to be answered. I can't answer them for you. But what I can do is show you what we're seeing from an intermediate-term horizon.

Our goals here are to make money this quarter. We care about the coming weeks and months. It doesn't matter to us what the market does next year, and it doesn't matter what it does today. Weeks and Months. That's our focus.

For this time horizon, the risk of owning stocks has been elevated. I believed the weight-of-the-evidence had been leaning this...

As stocks around the globe slump, we're seeing another failed breakout attempt in one of India's largest sectors.

Let's take a look at what it means and what it's going to take for it to finally sustain new highs.

First, let's start with the Nifty IT Index on an absolute basis. Last week prices pushed above resistance near 16,500 to new all-time highs, but momentum diverged negatively and prices are now confirming a failed breakout...suggesting more time is needed to work through this overhead supply and continue its long-term trend to the upside.

Click on chart to enlarge view.

On a relative basis, the Nifty IT Index has failed to make new highs relative to the Nifty 500 since 2014 and remains stuck below that level. A...