sp'daily5
We have the very first sign of a rollover on the daily MACD cycle, and we're now a moderate 16pts below the recent peak. Even a move to 1340 will not break the key lower channel line though. So, bears really should not get overly excited, even if we're trading in the low 1340s this Friday afternoon.
Only with a few closes in the 1330s..and preferably <1325, can the bears start to consider the more bearish outlook.
sp,daily4 - the 'more bearish outlook'
The problem the bears face is that in each of the previous collapse waves (May 2010, and July/August 2011) both had a noticeable catalyst which really spooked the main market. In 2010 we had the first concerns about Greece, and last summer we had the concerns over the US fiscal deficit/debt mountain.
So, the bears really need a catalyst to whack this market back through 1340, then 1325..and ultimately the strong 1310/00 resistance zone. I would think most doomsters could reel off a list of dozens of 'big ticking problems' out there, but, I do admit, for any major down cycle to occur, bears need a motivating issue in the days and weeks ahead. At the moment, other than 'Mr Market waking up..and realising a US recession is likely', I can't see anything in the near term to cause 'severe market upset'.
One final chart to close the day...
VIX, weekly
VIX weekly remains one of my favourite bigger picture charts, and you can clearly see, if we do see VIX +22, then it'd be suggestive there is a reasonable chance of at least a mini explosion to around 35/40 within the next 3-6 weeks.
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Both Thursday and Friday are filled with more econ-data, and we have the ECB who will doubtless do some meddling (even if its just words) this Thursday.
The initial first target is clear. Bears need a break under 1340, bulls merely need to contain things within the channel.
Goodnight from London