Sellers Step In
Sellers took control of the S&P market at mid-morning after a rally sparked by the Microsoft news. Earlier, news broke that the Supreme Court refused to hear the Microsoft antitrust case, which it remanded to a lower court.
That news caused S&Ps to sprint higher from new session lows to 1467 on buy stops and panic short-covering.
But the move turned out to be short-lived. The market remains weak, and S&Ps traded lower.
Currently, S&Ps are around 1453.50. The session low is 1451.50. We believe S&Ps are in a stair-step down pattern, headed to 1449.
Technically, 1463.50 is a critical area for the market direction. We rallied above that area earlier, but couldn’t sustain that level. The next level was 1455, which we’ve also taken out. We think it’s likely that we’ll take 1450 support level out as well.