You can almost feel the collective sigh of relief breathed by the bulls with today’s bounce. Whether today marks the beginning of some type of major inflection point is anyone’s guess. I suspect even if we are close to a major price low, the process of actually bottoming out will entail plenty of backing, filling, churning, and burning of longs and shorts, swings and scalpers alike.

Putting the sigh of relief to one side, what is within our grasp is the tangible evidence before us with the zoomed-out 30-minute SPY chart dating back to the beginning of this tumultuous month. As you can see below, not much has changed yet in terms of the overall corrective phase this market is going through. Defense is still the top priority until the bulls can sustain a better effort for at least a few days, and even that is no guarantee of a bottom.

Currently, we are consolidating this morning’s gains. A break higher into the close out of this high and tight base would represent a slight change in character. It would be a good start, but just that–A start. For now, though, if you remove the emotion from you analysis we still have a clear downtrending market on this timeframe.

_____________________________