07.27.2011 -- Damaging candle..

Key Levels

Upside -- 1310, 1317, 1324

Downside -- 1283, 1261

------------------------------

I want to start with a quote from yesterdays post;

"Lots of support under us from here til 1311. Below 1311 though, the market would have a major problem on it's hands. If this is more than a pullback, we'll have a big red day here soon. The most damaging would be a big red candle that takes out all 4 levels of support straight down below 1311."

Well, that's exactly what happened today. It's a damaging candle. We are now oversold on the hourlies, so a bounce is very possible, but we are now back under a lot of important support.

SPX Daily;

That's an ugly candle. We are now under the bollinger bands and the 50 and 100 dma's again.

Note also that the daily Stochs, MACD, and RSI didn't move much and have plenty of room still before entering an oversold state.

SPX hourly;

The hourlies look like we are going to head to the bottom of that channel. The MACD and Stochs in the hourly are in a very oversold state though, so a bounce of some sort is certainly possible. However, oversold can just become more and more oversold on the hourlies.

I think we have a date with the 200dma here at 1283. Bulls really need to hope that holds and we dont get a death cross in the SPX.

---------------------------

Debt talks are still crap, leaders still idiots. This will not be solved in any way shape or form. The fix will be short term and will last months not years.

---------------------------

The Russel and NASDAQ really took it on the chin today. Lose them and it's all over... the DOW can't make up for the Russel, NAS and SPX.

Buckle up...

we could bounce 10 points or tank another 25 tomorrow.

GL

CJ