1/24/2014

While the Dow hinted at it last Thursday, Friday saw the sideways channel on the S&P decisively broken, along with multiple support points for all other US indices. Markets lost between 2% and 3% for the most part across the board. Watching how this market reacts to support points on its way down will be be key.

It looks like the markets will test the lows from December - although the oscillators suggest they may bounce off it for a corrective wave. On the S&P, this is 1868, but I'd seek a break under 1865-60 . On the Dow, 15,700 is due to be tested.

The Russell 2000 still has some fib levels to break for the wave up from December low of 1100, as well as a channels support from October 2013. This index may not retrace 100% of the late December they way the others are hinting at.

The weekly charts suggest more downside after a bounce. And oscillators are classically double peaked in overbought territory on the monthly.

S&P 500 Daily Chart

Dow Jones Industrial Average Daily Chart

Russell 2000 Daily Chart