We've broken the 1 year trend line and closed below it on huge volume. This breakage needs at least one more day with the $SPX closing below the trend line to validate the breakage. Some would give it two more days just to be sure. The implication is that once a channel line is broken then you measure the width of the channel and subtract that number from the point of failure to get a measured move. The width of the channel is about 120pts and the breakage occurred at 1760 so a measured move would take $SPX down to the 1640 area. And this area around 1640 is important support as it turned the market in August and October of 2013. But first the breakage needs to be confirmed. If, by Wednesday or Thursday, $SPX can get back inside the channel, then there's a chance this pull back is over and $SPX may work its way back toward the top of the channel.
RSI is at 31 on the chart and usually you would see the markets turn when that happens, though not necessarily on the following day. Might need the RSI to drop below 30 before that happens.
Most of the breadth indicators that I follow gave extreme oversold readings yesterday and so I am looking for the markets to bounce hard for the next couple of days. However, there are certainly problems in Asia and elsewhere that may prevent this from happening. $DAX futures currently off 1% and they were off yesterday, as well. Margin calls may already be going out but if they haven't then any more down side is sure to trigger them and selling will beget selling. Be careful.
GL
RSI is at 31 on the chart and usually you would see the markets turn when that happens, though not necessarily on the following day. Might need the RSI to drop below 30 before that happens.
Most of the breadth indicators that I follow gave extreme oversold readings yesterday and so I am looking for the markets to bounce hard for the next couple of days. However, there are certainly problems in Asia and elsewhere that may prevent this from happening. $DAX futures currently off 1% and they were off yesterday, as well. Margin calls may already be going out but if they haven't then any more down side is sure to trigger them and selling will beget selling. Be careful.
GL