Market tries to dance to the rally-time tune

Trader Brian and ChartsEdge, among others, called it well this week with down into this morning! We were looking for some bounce and thete was no meaningful bounce until today. The technicals finally improved today too. So it's an effort by the market to rally finally. You can see it on my daily SPX chart, showing that the downside momentum finally started to lift. And the $VIX dropped. But the pall over the market is the likelihood of lower into October. Getting to SPX 1070, 1075, or 1083 just doesn't seem so huge now. There's an outside chance it could spike higher, but that 1120-1130 level looms as big resistance overhead. More likely the $VIX will get support on the trendline or moving average nearby and then climb higher as equities drop. Traders basically will have to see what kind of bounce follow-through next week can provide with the end month/new money effect. After that it's sobering, so even next week may provide less of a hurrah and more of a chance to pick places for selling.

The euro rose and the yen and Treasuries fell. But these too are likely to be relatively short-term trading effects. We'll look forward to more analysis later this weekend. Happy Friday all!