The sham of a GDP number (see: http://vantagepointtrading.com/archives/2055 ) gave false optimism on Thursday ; the reality of the situation is more congruent with Friday’s action.  But let’s look at the technicals:

Rallies on the S&P 500 in the upcoming week can be expected to experience resistance at 1042 and if that fails to hold then 1061.  A rise beyond that in the current climate is unlikely, but is (small percentage) possible.  A rise above 1070 would signal this market has plenty of buyers (or short coverings) and is good for another move higher.

Even Chuck Norris is short....but I am not gonna tell him.

If Monday trades through 1032 it is likely the market will continue lower, although this is not really an important technical level.  A continued move below 1029 points to a test of former swing lows at 1020 and then beyond that 1005-1000.

Based on a daily chart trendline the uptrend was still intact until Friday.  A down day on Monday indicates the trend has in fact been broken and we are due for a larger correction.

Happy Trading,

Cory Mitchell, CMT

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