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Widespread selling, but not widespread panic

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The markets continue to fall as the afternoon progresses, but it appears to be a nice orderly decline as opposed to chaotic panic selling.

S&P 500 60-Minute Chart

When the S&P 500 broke below the 50-pma and previous low on the 60-minute chart, I went looking for some possible support areas. The first thing I did was place a retracement bracket to the April 25th low and yesterdays high. I wasn't real confident in the 50% level since it didn't correspond to any significant technical points, but that seems to be where the SPX has found support today. Since this was a very short-term view, I placed another retracement bracket to the April 16th low and yesterdays high. The first thing that struck me was how well the 38.2% on bracket #2 matched up with the 61.8% level on bracket #1. The 61.8% level on bracket #2 also matched up perfectly with the April 25th low that we anchored bracket #1 to. That crazy Fibonacci. So with the 1240 level looking like it's going to hold, any further declines should slowed down at 1232 and 1220 on its way to 1207. 1207 is the support level that needs to hold if this is just a breather.

Jeffrey Canavan
Assistant Analyst

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