After the market broke a key long term support (the 200 day moving average) in early August, it has been quite a wild and wooly ride. Stock picking has once again been thrown out the window and everything has turned into a macro economic or government/central bank intervention news headline market. In the bigger picture the broader market, and S&P 500 in specific, have become range bound in a 100ish point range, 1120(ish) to 1220(ish). We've only been below that area once (on the Fed announcement day) and above it twice (last week).
[click to enlarge]
Hence, all the analysis and discussion during the movements in this range really don't mean much other than those making 1-3 day trades, or for daytraders. All of the key longer term moving average (50, 100, 200) are now trending down, and the index has not been able to yet jump back through even the weakest of these three resistance lines. Until we see that, it remains a sell on rally market.
If you twisted this chart upside down, we'd be consolidating after a big move up (bullish), so you have to respect the setup until it changes as right now we are consolidating after a big move down (bearish). At this point I'd like to see the S&P 500 over 1250 on a good bit of volume to return to anything other than neutral on the market.
Mr. Bernanke speaks at 1:30 PM so traders will look for pixie dust, and then Obama tonight. Otherwise Europe seems to have taken most of the focus this week.