CNBC is sticking to their
cheat sheet and calling this a correction, this is a snap shot from their website yesterday.
The market should bounce a little today, given historically the market has average at least 8 points
after a .06 NYUPV:NYTV ratio. Putting the market at resistance around 990.
Short-Term the market is oversold. Looking at the hourly chart of SPX, the Stoch are pointing to oversold and there is a slight divergence in the MACD histogram, both nothing to get to excited about.
The bulls were able to defend the 980-970 area but the bears were able to get below the 20 ema on the daily chart. This acted as resistance throughout the day. Watch this level for resistance again.
The bears were able to do a lot of damage to the daily chart in a short amount of time. (Good work boys!). There is now significant overhead resistance from 990-1018. It also provides some clean stops for shorting. The key level I am watching for SPX is 970, it has a confluence of key support levels on different time frames.
Hourly:
973 200ema
Daily:
970- Bottom of August support
Weekly
968- 50ema
This will the first area to really watch for a bounce or even to set a stop if you want to play the long side.
Looking longer-term which should take precedent over short-term, depending on how you trade. The week just started but yesterday SPX dipped below it's downtrend line which it had broken out of it. This trendline may now act as resistance to the market.
Short-term:
Oversold, resistance above, historically should get a bounce.
Long-term:
Market overbought, indicators turning down but support around the 970 area.
