Weakness emerged late as the markets closed near lows on reduced volume. This is not a sell signal as there is still a decent support level in tact, but investors should still be cash heavy and mostly stocking watchlists rather than holding sections.

Watch for the S&P to continue to close above 1070 as support holds up.

The S&P 500 has fallen 12% now in a little over a month. I don’t see the support level at 1070 breaking down any time soon as the we have seen buyers step in the couple of times prices dipped below it. Plus, volume has fallen lately each time the market shows weakness.

I think we will play pong with 1070 and the 200MA for a little bit until we get a high volume breakout on either side. This breakout will come from surprising news as the professionals want to keep you from jumping on their move.

More to come when something significant happens.