The big question in our minds is were those real sellers or just traders and short sellers who spanked the market yesterday? If the later, and if they don’t see real selling and some bearish news to confirm their positions, we know they’ll be scrambling to cover.
Our sense is the market needs to rest and consolidate here. It would be healthy, in our opinion, for the S&P500 to trade down to its intermediate trend line, currently around 1380 and hold.
That is how we see it setting up. Could be wrong, always flexible, and always with a stop.
(click here if chart is not observable)