Until Thursday, the bulls were in charge, repelling every attempt by the bears to break the market's uptrend, which extends back to August. Then a confluence of negative news events -- none of which by itself would have caused much of a stir -- combined to draw sellers from every quarter.
$SPX finished the day sitting right on the 1294 support level the same level that had halted the decline of a couple of weeks ago. A violation of the February lows at 1294 would be a negative development.
The other pertinent indicator is $VIX. $VIX registered a spike peak buy signal at 23 in late February. If that level is exceeded, then a more serious bearish trend is in place.
Breadth indicators had rolled over to sell signals.
Equity-only put-call ratios remain in a bearish mode.
In summary, a close below 1294 would be an intermediate-term sell signal.
Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, recognized as essential resources for any serious option trader's library.
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