After suffering a 27.35 point dip (-2.08%) on Friday, the S&P 500 closed at 1288.15. On a weekly basis, this large cap index was the only one out of three to close in the red…by 5.2 points, or 0.4%. More importantly, she’s on the verge of new lows for the year…not good for the bulls (though great for the bears).
The line in the sand is 1274. That’s where (basically) the S&P 500 has made lows this month as well as January. Of course, the attack on that support level has been much stronger this past week. So, we’re looking for the floor to eventually give way.
However, we’re oversold now…way oversold. The VIX appears to have peaked as well. Throw in the Fed’s likely help this week, and you do have the ingredients for a small rebound. The problem is, the Fed’s recent ‘help’ has had no longevity.
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