It has been an ugly November, enough to ruin your Thanksgiving. But was it unexpected? Not really.

I had thought the dramatic September rebound would lead to a retest of the levels we had witnessed. I fundamentally pinned this on two reasons--an ultra-nervous third quarter earnings reporting season and the Fed lowering rates. In my previous commentary, Rain for Roses; the Fed Irrigates Stocks [1], I wrote that a re-visitation of the 12,600-13,000 range was possible. Well, here we are, but it doesn't feel too good at the moment.

If the late summer lows hold, the market has another issue to deal with. Major trend lines have broken down--some that have been in place for years. The S&P 500 bullish support line, positively sloping since the March 2003 start of the Iraq War, was breached yesterday at 1430. It's one thing to violate a bullish support line formed earlier in the year that has propped up a stock, and quite another to drop through support that has been in place for 4 1/2 years. Other indices, sectors, and numerous stocks are also falling through trend lines en masse.

Are we due for a bounce? Yes, at some point. My oversold readings are now in the region of the summer lows, however, a catalyst needs to emerge. Might the market be already baking in the sub-prime news on a slowing economy? The end of earnings from here is a meaningful bounce, as investors turn from the rearview mirror and look ahead through the windshield.