The market rebounded and s&p dec future is trading around 1130 at the moment.The market is at the resistance of the range that has been in effect last couple of months.
Below is the daily graph :
Notice that 80 day MA is also below 200 day MA..Here is the weekly graph of s&P:
One extra thing happened since last time, which is 20 week crossing 50 week MA to the downside.I have been saying I am waiting for this pattern to occur for the confirmation of the beginnig of the bear market,but I am more cautious in this market where patterns appear and vanish easily.In the past there had been few cases when the bulls saved this situation and if 1131 does not hold as a resistance, this might be one of those cases.
See how 80 week MA acted as support during the selloffs,apparently that will be the big one to watch in the future.
Coming 4-5 weeks will be very decisive for the mid term direction of the market. I still back the bears below 1131, but we can easily see new highs if this resistance does not hold. So if this resistance is broken, I will immediately cover my shorts.
Whatever the case, the bull market which started on March 2009 got serious damage during the past 4-5 months, and the market will be very fragile even if the situation would be saved for now.