Overall, the big H/S pattern on the daily cycle is still looking intact. A retracement/back test of the bear flag (pink), up to around the daily 10MA - now sp'1385 (and rolling over), would be very natural. So, we could still easily rally 25pts, even a possibly minor (and brief) overshoot to around 1390. For the big 'serious money', short-stops would be around 1395 - where the old support level was.
IWM daily, bearish
SP, daily, bearish
Transports, daily
NYSE Comp, daily, rainbow
Summary
A few issues to note. Despite the morning gap lower, not all indexes broke new lows. IWM held the line, and SP' really only broke 4pts beneath the Tuesday low 1347. The H/S formation on the hourly chart is sloping lower...so even though it was a new low..it still held within the broad area. Even a further new low of 1342/40 early Thursday morning would be acceptable within the bigger picture.
The transports remain in a tight range. As I keep saying, whichever direction this index eventually does break, that'll be one of the biggest sell - or buy' triggers of this summer.
The NYSE Composite 'master index' is still very bearish on the rainbow 'Elder Impulse' chart, there is no sign of a turn back up yet. From a MACD (green bar histogram) cycle perspective though, the NYSE is pretty low, we can't be more than 2-3 days from a clear turn back upward.
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Probably one final posting to come this evening...not sure on what yet.