The lower chart shows hourly bars in the cash S&P 500 over the past 8 months. The market is still trading above the rising green trend line I have drawn but has broken below support defined by the May 2013 top. The average is also currently trading just above its 50 day moving average (not shown). The weekly bar chart at the top also shows that this average is trading just above the steepest of the trend lines I have drawn on that chart, a trend line that goes back to last November's low.
I'd say that if the S&P spends two full days trading below its 50 day moving average then these support lines will have been broken decisively. That would imply continuation down at least to 1600 or so where the drop from the September 19 top would equal the size of the May-June 2013 drop.
An even more plausible downside target would the the next lower rising trend line on the weekly chart.This currently stands near the June low at 1560.
Should the S&P instead hold above the support levels it is currently testing then the next up swing should carry the average to and somewhat above the highest of the trend lines visible on the weekly bar chart. This would imply a move to my long standing 1775 upside target.
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