After an ugly gap down this morning, the market managed a slow bounce in a tight 10 point range. Breadth was more than 4-to-1 negative and the bulls hit heavy resistance at SPY 138.75 which had been strong support for three weeks. Bounces in big cap technology names help to mask some of the weakness in small caps. We are breaking some trend lines in place since October 2011. In addition, the 50-day simple moving average is coming into play and could provide support from 135-137 on the SPY. We might see a better bounce in the next couple of days but the anemic action today and the sell off at the close foreshadows potential additional weakness on the horizon.
