Yesterday I talked about the importance of the 1490 area on the S&P (SPX). I stated that once reached, it would most likely act as an area of strong resistance and as a result bring in sellers.
The market was able to push the S&P (SPX) to the 1490 level early this morning (with a gap up) only to quickly fade and continue the move lower as the day progressed. The sell-off moved into high gear at the end of the day and brought back recent bad memories of last Friday’s collapse. Now the market as a whole is back in an oversold state so one would expect to see another push higher by the bulls in the coming days. However, I am not so certain this time around. The end of the day sell-offs have been sharp and severe. Furthermore, we are moving into a period of bearish seasonality. We could move deeper into oversold territory before we see another push higher.
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