07.28.2011 -- Date with 200dma

Key Levels

Upside -- 1310, 1316, 1323, 1339

Downside -- 1284, 1262, Then much lower

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Don't have a ton of time tonight, so straight to the charts.

SPX Daily;

As you can see, the Stochs, MACD and RSI still have room for more selling before you need to worry about a major jump higher. Today we had a fake out rally and then a reversal. I really think we have a date with the 200dma here in the mid 1280s. The break of 1311 and then the pop over it and close back under is significant.

Charts are beginning to feel like a true long term rollover is occuring. Also, that large H&S that was starting to feel very fragmented is looking much more healthy today.

Another major item of note.. the spread between the 50 and 200 dma's has collapsed to 23 points. A move below the 200dma for anything more than a day or 2 will put a death cross in play.

No SPX hourly today, only thing i'll note is that it's becoming deeply oversold on the hourly, but you can never trust that on the shorter term charts. Oversold can simply become more and more oversold.

Another chart of importance is the Russel 2000.

IWM;

The Russel also has a long term H&S feel, although not as clear as the S&P. The more important factor is that the Russel is less than 1% away from taking out the 200dma.

If the market loses the Russel, the NAS won't be far behind. If the market loses the S&P, Russel and NAS.. it's game over.

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Leaders are STILL idiots. US will be downgraded.

Again... anything can happen tomorrow... bounce 10 points or collapse another 25.

GL

CJ