Given today`s techincal damage and the July low of SPX 1200 near, we felt the following market note would be timely.
On July 29th – as the SPX was pushing against 1,285 – we penned a ‘Morning Cup of Jo’ discussing the July bounce and how the probabilities lie with it merely being a counter-trend rally. We went on to convey how to tell the difference between a trap and an opportunity. For three weeks the market went on with its unrelenting volatility of (+/-) 1 to 2% daily, essentially getting nowhere. After the maddening back and forth action it was finally the 1,300 level that became the nemesis which brought the July bounce to an end.