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| SPY June 5 2013 |
Orderly sell-off that broke the 1620 level without any trouble, winding up down around 1610. No panic, just a transfer of funds from longs to shorts. SPY remains in the long-term uptrend channel, any surge in fear is unlikely until and unless price falls substantially below 1600 and stays there. How the market reacts at 1600, the strength and duration of a bounce there, will be a good tell on where this market is headed over the next month.
As we noted yesterday, the failure at 1650 confirmed the intermediate term downtrend from May 22, and that is how we are viewing the market until we see what happens at 1600. The more time we spend at the lows with value building up there, the more Bearish the prospects become. Refer to the support levels discussion from last weekend for key levels to watch.
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