On Tuesday, the SPY gapped down through the recent support of 110.20-110.40 and that level should  now be viewed as important resistance once again.  Will the market continue to gyrate around this level, frustrating bulls and bears alike, or will this be the break of the mid point which leads to a larger breakdown?  That answer will be revealed to us over the next few sessions and all we can do is to treat the market more tentatively.  The simultaneous break of: support, the 20 DMA and trendline, all below a (now declining) 5DMA, add to reasons for a defensive posture.  It seems likely that support near 109.00 will be tested and if the market fails to find support at that level we have the 50 DMA  at 108.15, Dubai lows of 108.12 and the low of hte November 9 gap at 108.78 which will be areas of focus for potential support.

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