Monday SPX Overview

Friday showed us once again the short term memory of this market. On Thursday with heavy volume it felt like the sky was falling again as we excerated the move down in the afternoon session - The fear was back and many headed for the exit doors expecting that this might be the beginning of a bigger move down (and it still may be...). On Friday we retraced 60% of Thursday's move which at the onset may seem very bullish, but if we look at the charts it could also be characterized as just a normal short term rally back to the downward trendline of the last few days where a little market weakness could send it back to new lows. A break above that downward trendline tomorrow would certainly be a feather for the bulls and more price action to suggust that we may be headed to test the 1520 area next. If we do move up we'd expect so see some resistance at the 1513 level as well. If we bounce down off the trendline resistance we first look at 1503 for some minor support, but 1500 technically may be more solid since it's a round number and the 23.8% level for the Fibs on the chart below. As of Friday, the 4 day trend is still down. We'll need to break and hold above the blue trendline to reverse this trend. It may require some real strength tomorrow to break to the upside as the trendline is intersecting with the 38.2% fib.

SPX 15m Chart