Wednesday’s massive selloff signify resumption of the late July’s downswing. As the S&P approaches critical tipping point, we’re looking for the next major sell signal. The index could signal an extended downward trajectory, depending on how it closes over the next few days. If the market is going to find a bottom in the near term, we want to see the S&P rebounds off 2800

market internal deteriorated as S&P struggled to get pass the trend channel moving average. Monday’s weakness had improved the posture of our short-to-intermediate indicators, which remain supportive of a pullback. The longer the index stays below 2939, the more vulnerable it is to lower prices

it seemed to us that traders are committed to take the S&P above the important sentiment 3000 mark. Over the next few days, we will look for trading behaviors as the index probes the upper boundary of its short-term trading range. The market had historically developed key resistance near that level

overbought conditions have returned on a daily basis but momentum remains supportive so downside risk could be limited. It is possible that S&P could continue to drift higher as trading sentiment remains strong. As for strategy, buying into short-term dips remains the most profitable strategy