The drop breakdown a long term uptrend line (purple) with a long candle and huge volume, the correction found a support @ the Fibonacci 38.2 level, bouncing back from that point, this week started well but the trend after Thursday big drop create another red candle, and This Friday close, will effect the whole week, is the price going down further to recheck the last support and create a double bottom??
Now for the short term we are moving to the daily chart trying to figure the support points & the indicators directions.
The indicators are deep in the oversold zone, and need to recover, but they can stay there for longer period, I don't like the MACD that didn't cross up the moving average while the price went up sharply, that indicate that there is no momentum for the last uptrend, also the volume decrease in the uptrend days and increase in the down trend days..
Most of you, that read my tweets about the $SPX noticed that I mentioned several times, It's rare to see a V shape correction in the markets after a big drop, the W shape is more common and the price will drop back to recheck the last support (or close to it) to create a double bottom ....
So if the price check back the 1100 point and bounce back, it will be a bullish sign, but breaking it down and closing under that point will give us the sign that the bears won the battle and we are heading to the Fibo-50.0 point around 1020 as you can see it with the yellow lines in the weekly chart.
I will be looking for the close on Friday, maybe it will give us a clue about the overall direction, in these markets with a lots of volatility, we have to trade wisely and not invest, as it's hard to predict the direction and need to watch the charts of the markets daily and try to ride on the intraday volatility and work on 60min & 15min to get a short life trade.