NEW YORK (TheStreet) -- Any bounce or rally in the market should not be trusted. 

U.S. stocks closed lower Tuesday after a failed attempt to rally from the Dow's worst three-day point decline, which is something we have not seen since the 2008 global financial crisis.

The market had its first rally of the downtrend yesterday but it would be a big mistake to get bullish for new long-term investments at this point. The major trend is down. The odds favor that this is to be only the first phase of the decline. Today's rally could take us to 1965 - 2040 level on the S&P 500. 

Gold stocks have retraced a good portion of its move to 112 as it almost printed 107. The SPDR Gold Trust(GLD) - Get Report looks as if it is just starting a new downtrend looking for a count to 100/101. It is still intermediately confirmed bearish. At this time, since we have new positions on, wait until metals hit bottom and have been confirmed bullish before adding a new trade. Silver should have a nice pullback as well. Silve has now turned technically bearish today.

Current SPX Heat Map

Image placeholder title

International Markets All Confirmed Bearish

Image placeholder title

In the last week-and-a-half, the S&P 500 lost nearly $2 trillion in market capitalization, with $900 billion in this week's first two trading sessions alone.

The Dow traveled another 1,600 points during Tuesday's trading session which added to the 4,900 points the index traveled in down and up moves on Monday.

Image placeholder title

The SPX approached the low of the first phase of distribution. This is also working cycle wise. If there is a selling climax, I could see about 1830. This should be followed by a mid-decline rally to roughly 2000, about 50% of the decline from 2133 and my automated trading strategies has profited from this market crash. Should the cycle(s) interpretation be correct (bottom late September/early October), I could then work on the second phase of the correction which would take into account the next phase of distribution and its downside potential.

Image placeholder title

When investors first experienced the financial crisis that occurred back in 2008, they could not foresee that it would reoccur once again, now in 2015. We are about to experience the next "Great Depression." I am referring to this specific period of time that is happening now, as the bursting of the "Asset Bubble." The bursting of this asset bubble will be more devastating, over time, than the total damage that had occurred during the Great Recession of 2008. This will devastate and destroy what is presently left of our middle classes.

At the present time, we are witnessing the beginnings of the stock market crash of 2015

The Federal Reserve is now in uncharted waters. It is powerless and clueless as to what their next steps should be. It currently lacks the knowledge and tools, at this point, to stop the severe continuing contraction within our economy. It has kept interest rates at 0% for far too many years. I fear that our economy could start experiencing interest rates in the negative territory which has already occurred in Europe.

The VIX is a gauge of fear. The break out of the Volatility Index (VIX) above 53 on August 24 is a major warning sign that the magnitude of our financial and economic troubles are just beginning. The majority of our problems are soon to be revealed thereby reflecting that we are in an economic deflationary depression.

These markets are under heavy distribution with increased heavy volume. This is a sign that institutions are selling large blocks of stock.

Money managers are selling their existing stocks, and locking in their profits. This is not the same scenario which we have seen so many times in the past, in which buying the dips has been the normal pattern. Unfortunately, those days are now a distant memory, and the markets are not coming back in their roaring fashion, any time soon.

For more on this, ETFs and gold.