The key issue to me intraday is whether we are looking at either a trend day lower, or rather we see the bulls fight all the way back. If it is the latter, it will have been a brutal fakeout for bears to swallow. First things first, though. As you can see on the intraday chart of the SPY, the market is trying to get into gap-fill territory from this morning’s plunge. The bulls are trying to crack $136.63 (about 1365 on the S&P 500 cash) in order to get an afternoon rally going.

A rollover here, though, would have me holding onto my shorts, looking for that trend day lower. So, I am particularly zoned in on this level. Of course, this is all very short-term analysis. From an intermediate-term perspective, we continue to work through a corrective phase in a bull run until proven otherwise, which means that capital preservation should substantially outweigh any impulse for immediate capital appreciation.

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