Daily update 8/29

Another try by the bulls to defend the 100 SMA, but at the end of the day SPX was back below it.  Here is the daily chart.

SPX also closed below the last swing low again.  The bulls came out on a buying spree this morning, but again the market found its high and ground its way lower in the afternoon.  This is now day three below the 100 SMA.  Here is a look at the 60 minute SPY chart.

SPY tested the high of the recent big gap down day marked by the red line.  It found resistance there and moved down in the afternoon.  The last two days look a lot like an ABC correction pattern.  If that is the case then the pattern is complete and we should have started a new leg down this afternoon.  Today's high and yesterday's low should be important price points.  If the bulls can take out today's high they could have a successful test of the 100 SMA.  If we break yesterday's low instead then we should be starting a leg down that is likely to carry to the 200 SMA. 

The last two days clearly found resistance in the afternoon after morning rallies.  That would seem to indicate this is likely a consolidation on the way to lower prices.

Bob