Yesterday's move clearly makes the $SPX chart bearish

By Lawrence G. McMillan

The market is using the excuse of potential Syrian bombing to sell off sharply.  Yesterday was one of the ugliest days of the year, but still wasn’t all that negative in terms of pushing indicators into oversold territory. $SPX broke down what had been potential support at 1640 (last week’s lows).  This now brings support at 1620, and then at 1600 into play. $SPX is modestly oversold because it has quickly fallen more than 4 standard deviations below its 20-day moving average (see recent articles in The Option Strategist if you want an explanation of this concept).  There is now resistance in the 1650-1660 area, as well as at 1680 above that.  The move yesterday clearly makes the $SPX chart bearish in that it now shows a series of lower highs and lower lows.  As long as that trend persists, the environment will be bearish...

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