SPX closed below the magical and mysterious 100 SMA. That has been the only buy signal one has needed to know for the last two years. We have a modest short term oversold condition as well. This is definitely a better place to bounce from then we had on Friday.
The futures technically confirmed the break of the 200 SMA. If we don't bounce here the selling is likely to get much more intense. We are getting a bit extended on the downside now. For months the market has not liked it when it got extended in either direction. Do the bulls have yet another reversal in them?
By some measures this is the most oversold the market has been in months. If we don 't bounce here it would be a change from what we have been seeing for two years now. For SPX the 200 DMA (2042) would be the next target if we continue down. That seems like the lower odds scenario to me. If we bounce tomorrow I think we are to likely to fall short of new highs. An awful lot of individual stocks are breaking down from top like patterns. I don't think we are oversold enough on longer term measures to get the big money to pile in.
Bob
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