The support in the $SPY has been broken and that market is now below the declining 5 DMA which suggests caution. Fibonacci levels are drawn on all of the charts below and they should be viewed only for “potential levels of support” not a level to buy at. The failure of the $IWM to hold its breakout past the resistance at 83.00 gives us reason for most concern at this time (failed move, fast move?) but the large 81.00 level is still a safe distance away before real trouble might begin.
There is nothing to suggest damage to the trends on the dailyor longer timeframes, however buying blindly into a selloff has never been my preferred approach, we need to let the market establish support on shorter timeframes so we have levels against which to establish stops on new longs.
click charts to enlarge
