The bears have slowly been gaining strength over the past week. The easiest way to tell is that the Standard & Poor’s 500 Index has slowly been trending lower and lower. The accumulation of this selling has produced some oversold conditions, though.
The market took a rather sharp hit overnight last night (over further negative rumors of out Europe), recovered and saw another selloff this morning. It survived those bear raids and rallied. For three days in a row, the low on the S&P 500 SPX +0.32% has been in the area just above 1310, so that is certified support. There is resistance at 1330. This rally is in response not only to that support, but also to some short-term oversold conditions that had built up, most notably in breadth.
The major trend on the $SPX chart is still down, as there has been a series of lower lows and lower highs ever since the top on the day that Bid Laden’s slaying was announced.
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