SPX closed below the 1700 round number potential support. However, it ended the day at the top of the July highs. That was resistance will it now be support? Here is a look at the SPY 60 minute chart.
After the initial sell off in the morning the bulls attempted a bounce off the July highs. However, that bounce did not gather any follow through. The bulls were able to hold SPY just above the 50 SMA the rest of the day. There were 170 new lows and only 114 new highs. This is an extremely high number of new lows this close to the all time highs. This looks like a lack of desire to buy. Will that all change tomorrow or will the bears come out to play again? If there is down side follow through tomorrow a short term top is likely in place. The real key support is the last swing low of 1676. If that gets broken we are likely headed to the daily 200 SMA.
There are an awful lot of similarities with this potential double top to the tops in 2007 and 2000. The sentiment picture feels much more like 2000. Everybody today is convinced the market can only go up because of QE. Back then it was the new paradigm. Final tops in a bull market and bottoms in a bear market are always pretty tough to nail down. This is a really good candidate for the final high though. Buyer beware.
Bob
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