the weak action in the S&P over the past 2 days looks like the start of a new down wave. if the S&P can't get back above 1210 tomorrow i expect it to trade down to the lower end of the range around 1150 very rapidly. if this lower support fails it sets up a move to new lows under 1100 in the coming weeks. this would likely be followed by a sharp bear market rally, possibly sparked by the Bernanke after the extended September Fed meeting, but let's not get ahead of ourselves.
non-farm payrolls are released pre-market Friday. these numbers could be a catalyst to start the selling or help the market break out above 1230.. it's hard to believe that analysts still expect positive numbers given the terrible economic and consumer confidence numbers out recently, but you never know with that crazy model...
if the market breaks upwards the move should be contained by the 200dma and the neckline of the head and shoulders pattern, both lie around 1280.
i won't be around during the trading day Friday, so more charts this weekend after the action...
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