The S&P plummeted Thursday and Friday, aimed at retesting this year’s lows.
The weekly S&P is retesting for the fourth time an important congestion area between 4300 – 4200. If this support gives way, it’ll be difficult to see another significant support before the 3800 level. The weekly component of the FGIC has entered the negative zone, marking the third consecutive lower high (see red numbers).
The typical reaction rally within a bear market had reached its peak in early April, and since then the S&P has lost almost 400 points. FGIC has failed in its attempt to break upward from its neutral zone. It now continues negative, between -4 and -6.
A prompt rebound from the current support levels would be necessary to avoid a new deepening to panic levels.