I have updated the trend channel to something that makes a little more sense. I apologize for getting a little lax on my daily chart. I put in a support line and circled where that line is derived from. SPX is clearly extended but still hanging in there. It tried to rally a few times today, but the sellers showed up and stopped the upward progress. Lets zoom in to the 30 minute SPY chart.
We have a trend line I think we can work with. We have a third touch late in the day and the start of a bounce going into the close. We also have the 50 SMA in this area. If SPY can get above the high of that last bar (146.65) tomorrow it could bounce some more. If that happens I would temper upside expectations. I think we are too extended still to get real far. A break of that lower trend line could usher in a little more selling and cause a deeper pullback then we have had so far.
Bob
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