When the SPX broke the 1440 support level there really was no other stopping place until the 1410 level where it closed yesterday (Link 1). If the SPX violates this region and should close under say 1400 you have to go back two years to spot any semblance of support at 1250, the rest is air. Will the SPX violate 1400? It’s impossible to say, there is a series of four pronounced lower highs of 1576, 1550, 1525 and 1500. Together they define a very formidable downtrend and the market is being forced under it. On the other hand the market is resting on firm support after a stiff and consistent sell off which may need a breather. Notice the stochastic under 20, crossing over and turning up, bodes well for bulls. In the 15 minute chart you can see the SPX in a severe decline until yesterday morning when it bounced off the 1405 level retraced upward to 1423.87 then sold off back to 1406 before closing at 1416.18, doing so the price action formed the charactistic W formation. So this is it, we want to see the resistance at 1425 taken out and a small trend line in the 15 minute chart to form as well before going long the SPX. This is what I’m looking for.
Link 1: http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=spx&sid=0&o_symb=spx&freq=1&time=8
Link 2: http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=spx&sid=0&o_symb=spx&freq=7&time=18
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