Note that with today's close, we closed above the lower bound. This isn't entirely unexpected as its pretty uncommon to have that many days of consecutive drops in the S&P. Whats key is the next few days. If it fails to keep the support, there's a decent ways to fall still.
S&P 500
The S&P 500 has pierced its uptrend of the summer rally and sits right at the 50-day moving average. After making a new high a few days after the announcement of QE3, the index has been made a higher low and lower low. The S&P 500 opens the week at a critical level and really needs to prove itself.
NasdaqLed by the 10 percent sell off in Apple the Nasdaq is down almost 5 percent from its Sept. 21st high and has clearly broken trend closing the last four days under its 50-day moving average. The next support level is 3,000 and then the 100-day at 2865, which, if realized, would result in a 10 percent correction. Watch the price action in Apple, which needs to hold Wednesday’s low at $623.55.
China Shanghai CompositeAfter a week off the Shanghai managed to rally almost 1 percent last week, closing above its 50-day moving average four consecutive days. It has broken its ugly downtrend line but needs to prove itself. Let’s see if it rolls over again going into the November 8th leadership transition. Support is at 2,000.
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