Well, we’re back at a critical support level on the S&P 500, very clearly evident on the 30 minute chart below. From these levels, we’re in significant danger of breaking down further and testing the last medium term lower trend line that remains intact.
On the two day chart, we can see that below 1800, there is almost nothing in the way of established support. Should the index break down below that, its hard to say where the market could find its footing. It become a matter of the market continuing to discover and define the nascent downtrend originating from the 2015 high.
It need not be this way, but the dangers are clear. Should the well-established uptrend support lines hold, we could be looking at an excellent entry point for a long trade. The market is significantly oversold, so the value proposition on the long side is getting more appealing the lower we go.
As always, be cognizant of the dangers, though. We’re at a precarious juncture. Keep stops tight, don’t let any drawdown get away from you. Good luck out there.