For some time, we have been labeling the November 2012 low (1343.35 in SP500) as the start of the final stretch of the Hope Rally in stocks (Chart 1, point 6 to point 7). The sell-off in December in reaction to "fiscal cliff" anxiety did prove to be just a pullback as we have predicted. Over the past week, stocks have enjoyed a strong relief rally on the heels of a fiscal-cliff "deal." 
Now, the "fiscal cliff low" (the December 2012 low of 1398.11 in SP500) has the potential to confirm the end of the Hope Rally when breached. In the less likely but certainly fitting case that the final stretch morphs into a wedge/EDT, we still have to rely on the November 2012 low initially before we are able to "tighten stops" later on. Chart 2 shows the likely structure of this decade-plus bear market and the downside potential for its final decline. Under this interpretation, our job is to "simply" track the upswing and monitor the logical end points for its wave structure. To this end, Chart 3 offers top tracking counts on SPX and Chart 4 updates a potential "fractal" in VIX discussed in the daily update on 12/31/12.
