The S&P 500 continued to sell off hitting the low of 1916.37 but closing at 1925.15. Traders need to realize that we are going through what we believe to be a very significant initial corrective move that very likely will last much longer but prices should try to rebound off of this 1920 level and should at least try to maintain the 1900 range. We do see a potential bounce back into the price action of 1945 to 1960 level but do believe that we will see significant resistance and continued selling as prices attempt at a rally.
We do believe that unless 2000 range is broken with some momentum we are very bearish on this overall market and do expect potential continued action of the downside when some of this counter move or bounce rally is sold into. Any break from the 1900 level and we do believe that that could signal further declines very likely into the 1600 range so we could be seeing a 300 point drop and the S&P over time. Keep in mind that there will be some struggles here as prices will attempt to retest the prior swing high 1990 but we do believe that those attempts very likely will be futile.
