SPX -- Daily

The SPX has again found support near 1875, a level that has contained downside thrusts since
the autumn of 2014 at least on a closing price basis. SPX Daily

The latest rally attempt from a deep oversold has been a fizzle to this point, with the market not
shooting up strongly after a spike bottom as it has over the past three occasions. Of itself, the
challenge to the latest bounce off support does not cast a shadow of vulnerability, but it does
suggest there may be an alteration of the recent pattern away from single point bottoms. Testing
of support may well again be at hand. The persistent downtrend in shorter term RSI suggests
that traders who are not terrifically nimble think twice about long side bets until there is a
positive reversal in that indicator.

The broad stock market remains sensitive to the direction of the oil price which has not made
a clear bottom after months on end of bust, although, and this is worth noting, the price of oil
is fast approaching an annual low on a purely seasonal basis. Weaker petro and gas sector earnings
have not been fully offset by wider profit margins for net business consumers of product on a
macro basis, with SPX net per share under pressure just as it was over 1984 - 1986 when there was
a very sharp blowout in the crude price. It has not been helpful to the stock market this time out
as investors must contend with the economy's flirtation with deflation and an elevated p/e ratio.