The S&P 500 was attempting to hold near the low formed last week that came on the heels of the post-election collapse in the US stock markets.
It just so happens that the low was in the very near vicinity to the critical 50% Fibonacci Retracement Level of the entire rally of the late May/early June swing low.
It bounced away from that level yesterday but today, down it went.
The index is now poised to drop all the way to the next Fibonacci retracement level, the 61.8% level, or the 1340-1344 region.
Failing to hold there, it should retrace the entirety of the rally meaning that we could very well be looking at a drop through the 1300 level on down towards 1275 or lower.
The onus is now on the bulls to hold the next level of support at 1340 if they have any chance of regaining the near term advantage, which clearly lies with the bears.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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