April 7, 2014: SPX succumbs to overwhelming selling after failure to retain layers of moving average support.
Sellers overwhelmed equity indices as SPX loses multiple levels of nearby support. A defined reversal pattern projects an imminent test of the widely watched 50 day moving average. This test will be confluent with Weekly Implied Volatility Band support and oversold conditions suggesting a reflex rebound should be anticipated. The quality of any oversold bounce will determine the likelihood of a potentially extended corrective phase. Prudent traders/investors should be patient and wait for better trend direction clarity. Speculative traders may consider layers of overhead moving average resistance as targets for an inevitable oversold rebound.