Downtrend Remains Intact

Initially, I had some concern that the bullish price action yesterday was evidence against my projection of a downward move below 1000 on the S&P 500 (or below 100 on the SPY ETF). However, one can see on the chart above that the 50 day moving average coincides with the upper trendline of the down going channel, and price action has failed to break this area of resistance repeatedly over the past week. Until those lines are held by upside price action, the downtrend remains intact. One potential cause for optimism is that we now see a divergence in the trendline of S&P 500 price movement and the MACD indicator (i.e. the trend in MACD is increasingly positive). Such divergences typically predict a reversal of the current price trend though it can take weeks to months for this to manifest. CLICK ON IMAGE TO ENLARGE CHART