Price held above the 50 SMA today. They managed to get a close above yesterday's low to keep the bulls hopes alive. We are below the lower rail of the regression channel which makes price a little over sold. However, both breadth charts have negative crossovers so we have a different situation then the last two pullbacks. Bounces when they happen will likely be short lived. Here is the 130 minute SPY chart.
The first support line held today and bounced off it into the close. I have add a new line at the last swing low from 7/12. There could be a lot of stops under that low. If we break it, the market could accelerate down. I did not make the line green because I just can't see all that much support there in the chart really. If we test that line we may bounce intraday, but I don't have any confidence it will hold for long. We still don't have very good price action to draw an upper trend line so the 60 minute 50 SMA is still likely a good bull/bear line.
The price action since the June low looks like a correction to the move down in Apr. and May to me. It is possible we are starting a new leg down that will end up breaking the June low and keep going. I will be watching the initial jobless claims closely now. If they start kicking up over 400k the market might react very negatively to that.
Bob
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