After an uninspiring cursory bounce off support the first time around (the S&P 500 could only bounce to about 1176) the computers took the index down below the 50 day moving average of 1171.5. That likely triggered a rash of stop losses... which the computers then can collect and then move the market back up over 1171.5. Or at least that is how I think the computers think. Still trying to learn the ways of the HAL ....
Just as the first cursory bounce off support about an hour ago meant little, this first shake out below the 50 day most likely is just computer gamesmenship... well technically I guess it's not having much to do with men since 70% of volume is automatic nowadays. Let us call it gamessiliconship. The behavior after the shake out below the 50 day is the thing to watch here once those stop losses were stolen. Even a move back up of 2-3 S&P points here would create bountiful win for the dominant quant hedge funds (and Goldman Sachs super whirling computers).
Even as bears feel good at this moment, they have to know the S&P futures buyers are gunning for them ;) Good theater at least.
EDIT 12:48 PM - reader Sam makes a great point, if you use simple moving averages rather than exponential it was a perfect bounce off the 50 day SIMPLE moving average. You can see that in the chart below.