Should the S&P 500 ETF (SPY) continue weak and close lower again today, it would mark the sixth lower close in the last eight days. Late September-early October was the last such occasion. With the ETF down around 4% from its highs, it is already getting short-term oversold. However....
...there are no signs of firmness yet. I would expect an indecisive candlestick to form before expecting some sort of low. MACD continues to work lower as SPY moves towards the August trendline around 105. This is the first place to expect support and possibly an oversold bounce.
Click this image for more details.
The decline shows signs of accelerating lower on the 30-minute chart. After stalling around 107, SPY moved below 106 today with a rather sharp move in early trading. Basically, the ETF tried to firm around 107, but there was no bounce. This shows weakness on the demand side (buying). The first resistance is set at 107.5. However, I will leave key resistance at 109.5 and require a move above this level before considering this downtrend reversed.
Click this image for more details.
