S&P 500 close August 27 2013 at 1630.48

August 27 2013So that was quick.  The S&P 500 tumbled out of the gate today dropping another 26 points to finish at 1630.  I made a mistake on an earlier post about the next lower technical level.  I mentioned 1610 as the next stopping point.  In actuality it was 1630.  This is the level that we traded down to in June before Bernanke rolled us over going into the last two week of that month.  The attached chart shows the area around 1630 as a huge convection area.  Anything below 1630 and we will retest 1600 (by way of a mild hiccup at 1610).

Again, big moves on small volume.  The market wanted to test down starting about two weeks back.  Unfortunately we won’t really know if it is a structural move or just a vacuum in volume until everyone comes back from the holiday next week.  I would be skittish on both sides of the trade right now.  It is one of the reasons I am still yellow-yellow on my outlook.  The forces are lining up to push lower but I would be cautious about trying to catch a falling knife or piling on to the bear trade.  Neither one makes real good sense right now.  This thing could completely reverse itself and everyone jumping on the bear bandwagon is going to get hammered.  It does make a for an interesting spectacle though.


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