The S&P made an abrupt about-face today, closing slightly higher after making a new post-November-peak low. The rally does little to change the longer term technical picture though, that of a multi-month broad arching top. Still, there is a long way to go before we can say definitively that the bull market is over, despite plenty of noise in the blogosphere to the contrary. Lower trend support levels around 1920 and 1880 remain intact.
From here, an oversold bounce could quite easily take us back up to the 2090 level within days, should the conditions support, so despite the bearish outlook, we’re at a poor place near term to apply short positions. If anything, we’re looking at a decent, if unimpressive, buying opportunity. Regardless, we’re smack dab in the middle of the market’s medium term trading range, so the risk-reward profile on either position is mediocre at best. Trade this market with great care right now, it really could go either way. Good luck out there!