Early May the market sold off and it looked like it might end this rally but the market managed to climb higher after a bounce off the 884 level. What makes this move down different, is the break of support and the strength of the selling being show in some indicators.
$NYAD- Early May it dropped but quickly bounced and stayed above all its moving averages and didn't break a trendline. Now look at the NYAD it has dropped faster, broke it's trendlines and moving averages. The moves in the NYAD this time around have been with great volatility as well.
$NYSI the longer term indicator has also been selling off. In May it moved down but was able to bounce up. This time around the move down is sharper and is being confirmed by the moving averages, a cross of them would be a signal more selling can be anticipated.
$BPSPX has been a good indicator of when a sell off my occur. In May it barely dipped as the market dropped as people remained bullish. Now it has steadily declined during this sell off, similar to how it sold off in early 2009.
So with the indicators point to more selling strength then last May and the market breaking key support levels, it is possible that this market could move down more. I am looking for the 884 level as the first bounce level and will take it from there.
