When we were trading at the 200 MA i posted that it's a "must hold" area or the decline morphs into a primary degree. Lo and behold, the bounce came exactly there. Do not confuse bounces with a bottom that produces a sustainable rally, no matter how big it is. Recall how the 120 point plus rally in SPX fizzled out a couple of days back ? It was a no brainer to spot a bounce coming off the 200 MA, but it is still not in a configuration to produce a sustainable rally at this point. My swing signals remain in a bearish configuration. I am still looking to short as far as the swing trades are concerned. SPX 2620-50 area is where i would initiate my swing short again. If the market rallies above 2650 and holds, then maybe we did put in a "bottom" today for a multi-day trade. I can only make that assessment on Monday.
It's too early to call this a bottom. Multiple retests of 200 MA is not uncommon.
But write this down. If we break below the 200 MA and drop another 50 to 100 points, this will not be your plain bull market correction. This will morph into a full blown bear market. More later...