Stock market dip timely, but is it buyable? Technical charts view 11-9-11

Here's a chart view of the stock market, and how today's steep drop stacks up. The S&P 500 index (SPX) fell back once again from the downtrend channel line that I'd marked - or was it the 200-day moving average? The indicators also registered weakness, but actually not fatal. And you can see there are support levels, such as 1222 (the 50% Fibonacci line on my chart), the rising 50-day MA about 1200, the 1215 prior low, and even the 1187 Fibonacci line. Time-wise, we've been thinking of a low perhaps as early as tomorrow. So we'll watch closely from here.

I've also included below the McClellan and the bullish percent charts. Long story short, they corroborate that the stock market dropped after negative divergence, but can probe for and find support in this time window and price levels shown above. The alternative is that the market just drops from here. Right now, we're inclined to think it will find a low, either tomorrow or certainly by the end of November at the described levels, and then make a Santa rally to retest much higher into December.

So give it respect, but also the benefit of the doubt, as we see how it behaves tomorrow (and Friday if need be).