Technically speaking, we're in a box

Yesterday's reversal was impressive, especially in a face of a number of very negative macro headlines. The day could have turned out very ugly. But the S&P index held a very important 1044 level, bouncing nicely off of it. Today's follow through is nice to see, but its premature call it an 'all clear' signal. As I said in my previous post, the 1010 level on SP is beckoning and I think the odds are that we will revisit this level.

For now it appears the market is in a 'box' 1040/44 - 1085/90 on SPX. If you want to trade for a quick profit, these levels are pretty good.

In order for me to get a bit more constructive on the market, I need to see the SP to either break down and hold the 1000/1010 support (also 32% Fib retracement on a weekly chart) OR to break above its recently violated 200 day MA at 1108.

So we have two sandboxes to play in: 1040-1090 (50 point range) and 1010-1110 (100pt range). So overall, don't get suckered in in chasing rallies...I think buying dips near 1040 is a more conservative strategy in this market

Good luck.