The State of the Trend
The Sp500 continued stair-stepping down from one support level to the next and reached our chart target of 1346 by the end of the week. Market breadth bottomed-out on November 13th and showed a positive divergence on the 14th. As expected, that helped stem the decline but it didn't achieve much more than that. In fact, the index finished the week 15 points lower than it closed on Wednesday:
The fact that the index closed lower despite improving market breadth shows how weak and vulnerable this market is. At the current rate, market breadths should peak in three days after which the sideways/down phase should continue.
The critical support level to watch on the downside is 1346. A drop below will open the door for a retest of 1330 and 1313. The first resistance level comes in at 1362 which coincides with our daily pivot point:
We'll conclude with a monthly chart update as a reminder that the SPX has entered a period when extreme caution is advised: