Option Investor
Update
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After the sharp spike up off this morning's low the market seems to be doing just enough buying to hold things up but it's not exactly bullish looking. A break back below SPX 800 could set off some stronger selling but in the meantime it's looking like there's enough new-month money coming in to help keep things afloat and it keeps the upside target at SPX 814-816 alive. The daily chart below shows the same picture as the 60-min chart posted earlier but of course a wider view. Assuming we'll get another leg down as part of a larger pullback from last week's highs it will be an important test for the bulls to see if they'll be ready to jump back in and drive it higher (pink wave count) or if instead the bears take the reins back and drive it to a new low.

SPX daily chart:
[Image 1]

One note that I'd like to add to Jane's last post in which she shows the divergence between MACD and price. Not to rain on her parade but I've always understood any divergence between price and the oscillators to be a negative divergence. So the new high for MACD while price was unable to press to a new high could be considered bearish. I just wanted to add my take on it since different people have different interpretations for this. But the MACD higher low on the weekly chart is clearly bullish (also considered negative divergence, meaning the new low was not bearish). What we don't know is whether or not we'll get one more new low in price with another higher low for MACD.

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