It has been a very slow week in terms of news, and I get the feeling that many are on holidays or in a "wait and see" mode. The recovery/no recovery debate has been beaten to a pulp. Earnings season doesn't get quite underway until next week.
The selloff to date has run into the first area of support on the charts. Secondary support levels are around 830 and 780. It is possible that the selloff has exhausted itself for now. A number of my shorter term indicators are flashing oversold, and the bounce that ensues should give us a signal as to whether it was just a seasonal movement before late summer highs ahead, or simply a working off of the oversold condition.
I favour a move to one of the lower levels mentioned above, but will hedge my short side exposure with some calls in the financial space. I'm taking a long weekend for some much deserved R&R. I'll be back Sunday and will hopefully have a technical update before Monday morning.
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