The stock market, as measured by the S&P 500 Index SPX, has broken out of its trading range to the downside. The close below 4330 was the catalyst, as we have been saying it would be.
The next support level is at 4220, but this breakdown establishes a downtrend on the SPX chart. That is, there is now a pattern of lower highs and lower lows, and that is the definition of a downtrend (red lines on the accompanying SPX chart). This is thus more than a mere correction in the bull market, and it could last for a while.
On…
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