Overnight the tone of futures markets has been pretty negative, pushing the major indexes to levels that could retest the trend line support at open if we stay this low. The S&P has been flirting with 820, a very key level that if significantly violated to the downside, 813 and 800 remain as important support levels. After 800, we have a vacuum that could reach the November lows. Of course a violation of 820 on the downside will be seen as a breakdown of the modest uptrend and that could catalyse a wave of selling.
One discouraging sign is since the small rally in early January, every time the S&P 500 has bumped the 50 day moving average we’ve seen a wave of selling. Market participants are not commiting to long term positions, but range / trend trading short term and this action is increasing volatility.