got the drop, now looking for a bounce...

From the last post I noted that the inability to hold the SP500 1225 level after an initial bounce could result in a +3% move below the 1225 support level. Right now the SP500 reached an intra-day low of +3% below the 1225 breakdown. With the stock market being short term oversold I would look for short term bounce to start very soon either by tomorrow or Wednesday. The chart included shows what I'll be looking for... a bounce rally back toward the 1225 level and then back below today's low of 1183 (or the price low tomorrow if it moves below 1183) before getting a better short term or even a medium term rally back higher. Other scenarios could develop... the stock market can go either much higher or lower... but we'll see what develops in the coming weeks.

line is drawn... market must hold here

The stock market had a great +1 month rally since the last post. For the last two weeks the 'pause before going higher' scenario hasn't developed and the major indexes has moved down to an important support level. For the SP500 this is the 1225 area. No doubt there should be a bounce around this level but if the SP500 stays around the 1225 area without moving back higher then for the short term another +3% move down could occur.