The S&P 500 has plunged precipitously many times since the 2009 lows. Yesterday’s 40-pt swoon not only reached our downside target range, but tagged the channel bottom from May 2009. A reversal here would allow the appearance of an ever-improving market to continue. So, that’s exactly what we’ll get today.
As we noted in yesterday’s Big Picture, SPX’s low yesterday tagged the target we first set on June 1 [see: Sell in May, Go Away] and made official on June 8 with this chart:Without last week’s fakeout breakout, the timing would have worked better for a tag of the intersection between the purple channel bottom and the SMA200 (thick red line.) Yesterday’s close definitely broke the channel bottom by a tick or two.
…and, CL has rebounded off the lowest possible point that would permit us to consider the white channel midline intact……we’re left with two important questions. How big a bounce will we get today? And, is sell-off over?
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