The S&P 500 broke support at 1770, confirming a secondary correction. At times like this it pays to look at monthly charts to gain a long-term perspective. The first line of support is at 1700. Respect of the secondary trendline would flag a weak correction indicative of a strong up-trend. Breach of that level, however, would suggest a strong correction to 1550 and the primary trendline. The scale of the bearish divergence on 13-week Twiggs Money Flow, when compared to the divergence in 2007, suggests medium-term selling pressure — typical of a secondary correction rather than a (primary) reversal.
CBOE Volatility Index (VIX) crossed to above 20, suggesting moderate risk, but not yet cause for concern.
The Nasdaq 100 retreated below 3500, warning of a correction. Again, the bearish divergence on 13-week Twiggs Money Flow appears secondary and no threat to the primary up-trend.
Colin, thanks for the analysis ; much appreciated
I like the use of monthly charts for S&P500 or any long-standing symbol, but the best indicator of a serious trend reversal is a substantial MACD cross. MACD has worried the line from time to time since the 2008 meltdown, but isn’t close to it yet.