Stock Market -- Technical

What's clear is that the market has been trending down since its
1/6 high close of 935 on the SP 500. Where we're headed in the
short run is not clear in my view. There was a steep low of 805
on Mon. 1/20. that produced a reasonably deep oversold and a
quick bounce which has had no follow through. The bears have
had no luck in recent days, and the market has drifted out from
underneath a short term down line, leaving us with a now
moderate oversold condition.

The market is interesting now because my intermediate term
indicators are close to turning nicely positive despite the weakness
we've seen since early Jan. Since I rarely short oversold situations,
I am hoping for a positive turn for a trade.

Had the market rally stayed intact beyond the 1/6 high point,
It would have strongly suggested to me that the market was
starting to come out of the woods. Instead, the selloff killed off
that notion for the time being and leaves the market in bear
territory. I also note that the SP 500 remains far below its
40 wk m/a, and this leaves me wondering whether any rallies
can sustain until that 40 wk moves down closer to current
levels.

From a trading perspective, the long side has been home only
for the heroic in recent months as there have been few solid
set-ups of the sort that more conservative traders might favor.
The sharp break following the 1/6 top did provide an ok
set-up for a short index trade.

I am happy to watch and wait in the days ahead...

For SP 500 chart, click.