I'm treating today the same way IBD would call a bottom. First you have strong move up and then within 3-5 days, or so, you have a rally of close to 2% to confirm the up move. Obviously, I'm looking at the inverse of this with today's 2% decline confirming the large moves from late last week and Monday. To me this is saying that traders should expect lower lows from here as we are witnessing a change in trend.
The on the $SPX is confirmed with three closes below the lower line. This sets up a measured move of 120pts which takes $SPX back down to the 1740 area. This will also bust $SPX down and out of the rising on this chart, which is anchored on the lows from November of 2012. And this is likely only the beginning of what I believe is going to be a major correction. The last time we had any type of major correction was back in May of 2011. That correction lasted 5 months. I believe we are going to see something similar and perhaps worse.
In the short term, the $TRIN closed at 2.18 so is oversold. $NYUPV closed at 83 and is also oversold. There are a couple of other breadth indicators that also moved into oversold territory today so don't be surprised if we bounce or maybe just pause for a day or more before the next leg down begins.
Be careful & GL
In the 60min time frame, the RSI for Q's, IWM, SPY, & DIA are either just below 30 or right at 30.
All of the above suggests that we are short term sufficiently oversold enough for a bounce. I'm guessing here, but if we're going to bounce, then that bounce should start Sunday evening in the futures.