Chart Courtesy of StockCharts.com

  1. In October we saw the seasonal tendency for expanded volatility to the downside. 
  2. A pullback to the 50 day SMA is a normal pullback in a strong bull market. 
  3. VIX was held at 14.82 back under it’s 200 day moving average. The VIX expansion failed over the 200 day SMA twice last week. 
  4. The Average True Range expanded to 2.12 last week the greatest increase of trading range since August. 
  5. The MACD has been under a bearish cross under since September 26th.
  6. The drop on Thursday and Friday was on almost double the normal volume. 
  7. The $SPY bounced at the 50 day SMA on Friday, this is the level that needs to hold for a normal pullback in an uptrend. 
  8. $SPY currently closed at the 45 RSI on the bottom half of the RSI reading for the first time since early July.
  9. The 30 RSI is the next key level of support if the 50 day SMA does not hold. This 30 RSI dip could be a confluence that aligns closely with the 100 day SMA eventually. 
  10. The most important question in this chart is “Where are the buyers waiting to step back in?”