Trader Update -data point 26 September 2012-

...finally,  concerted action to correct an extreme overbought situation in the SPX 500 market as the index got pushed lower into the first serious short term support range close to the 7 September 2012 High *1437.92

 ...institutional selling spiked into last weekend with just a bit more selling into yesterdays Close - so the selling rout did not happen unexpected with a crowd unable to support a market without institutional buying support

...in the hourly frame, the market hit extreme oversold and may consolidate at todays closing level for a while 

...but, in the intermediate daily, more work needs to be done to work off the overbought condition further in the SPX 500 market

 

...as a result, since the overbought condition in the SPX 500 market just started to correct, there is a good chance for a follow through selling action to challenge the 21 August 2012 High *1426.48 with futher downside potential into the *1400 level - however, protection needs to reflect a highly likely 'long' market into new all time Highs and therefore the sell-side protection should slowly give way to a positive biased protection level, each time the index reaches into another support level

 

Kind Regards