"We'll want to see how the market and leading stocks respond should they hit support at the blue lines."
We've laid out uptrend lines and support lines in the index charts above and until they break we won't head for the 50 day average or prior supports in the indexes."
Folks as you can see today we blew through the uptrend lines and support lines and are now hitting the 50 day average if not more. We say if not more because the initial breakout on the SPX is 1150 (Green Line).
In addition to that over the weekend we talked about a potential head and shoulders formation brewing and sure enough that broke to the downside today.
We need to see where stabilization in the index is going to play out. It's either right here or the 1150 green line on the S&P 500 and the 2400 or the green line on the OTC Comp chart.
The big question on our mind currently is:
Did the market actually finally top? If so how do we know? What do we need to be on the lookout for from here with any bounce. Suffice it to say please brush up on your short sell patterns as we will be covering those in the days ahead.
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Disclosure: No positions