Currently as I review the MACD charts on SPY time frames from 15, 30, 60 minutes, there is no classic bullish divergence on any of those time frames. So that leads me to suspect that the short term down trend may not be complete.
Today stocks are set to gap up, but I would not be surprised to see price fails to rally in a significant fashion before another push to lower levels is made. That being said, IF price does push to a slightly lower low with some bullish divergence and price then reverses higher, I would anticipate a brief rally attempt which may meet resistance in the 195-196 region, which would be a pretty sharp move likely.
If SPY gets hammered down today with another major sell off after then open, then it would seem more likely to me that the August lows could be tested this week. So in short, I would not go long the equity side here yet, until at least a bullish divergence is present and price confirms a little upside with a bullish cross (moving average, MACD, etc) on one of those lower time frames.
Pete
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