I think many of us believe that without the financials on board, we can't really go much higher.  So a break of this flag may be all the signal we really need.  Here is a daily and monthly view of XLF.  Just thinking.

We all know about what AAPL did yesterday and what NFLX has been doing.  What about some of the other leaders?  Draw your own conclusions... maybe everybody was just nervous before the FED, or maybe something else is happening.  But when the leaders start looking negative....be very careful.  There are still some stocks that look strong but not enough to keep me from going full defense.

OK, I see it.  But... I still like my view.  Guess we'll see how it plays out

It looks like a rising wedge on the daily.  When you step back to the weekly then you see it appears to be the third in a series of bear flags since April.  Either way calls for the possibility of more downside to come.

In the early stages of either, they can be very difficult to distinguish from each other.  However, I would argue that what we are in now did not come out of nowhere.  The market was simply going sideways for almost the entire year prior to breaking down.  Besides, nothing seems to happen slowly to the downside anymore.  Everybody has the information quickly and is looking to lock in profits.  

So, keep it simple, until you are sure about what is going on you keep your bets on the side of the larger trend (down) and you keep your timing shorter.  If it changes, you adjust.  What you can't do is make longer term bets against the trend.  You'll get burned and learn a lesson that you don't need to.   

You'll have to look thru the S&R Lines

Counts 5 on the 5 minute.  FWIW

I am in the flag camp and we may get the answer tomorrow from the way things are looking.

From a trading standpoint if you believe that this is only a correction then having a tight stop below the trendline makes sense.  If this is a bear market (as I am biased toward)  then I would say look what happened to the stock by March 2009.

 However, if you buy near the trendline with a tight stop below - that is a good strategy that will minimize your losses and it might work out to your advantage.  Overall just be careful about holding longer term against the apparent longer term trend. 

On the weekly the selling has just really slowed down (via oscillator) although it shows us in a possible  W3.  The daily looks a little erratic but certainly looks like a move to the upper BB is doable.

Looking at a chart after the fact, it's always easy to make it look like the 200 was turning down.  In fact, it takes a lot of down price action to move that slow lumbering MA.  Most of the time the 200 would probably be at best flattish before the 50 crosses it.  We all want to be out well before we see the 200 change direction.

SPX 5 year

Looks like it could move all the way to about 174 ish if it wants to.  Waitng for a turn on smaller frame to resume short.  Also testing the 20 day from the underside on the daily.

Don't know about the ema but I think we are likely long until 1187 or maybe even the 1222 area- that's where you should be expecting a turnaround.  With all the hoopla about Jackson Hole on Friday I'm thinking we'll probably be right at one of those areas on Friday.  I'll be waiting on the sidelines that day.  I really hate surprises.

Weekly may turn up tomorrow after a nice up day like today or it could go on a couple days, but real soon.  Here's the BPENER, a little tough look but my guess is it goes positive for a bit.

NYSI W

BPENER

The wave 4 triangle on the 60 matches the oscillators so we'll just have to hang out and see what breaks first.

Can certainly go a little higher but the risk is on the upside now, IMHO. Even way above monthly BB's.