Market Update 1-21-10

This earnings season isn’t working out to well for the market and the big question is if this is going to turn into something more.  Obviously the markets have been very overbought and the VIX is extremely low long term as our post noted last week.  Today the market confirmed the downtrend that we have been watching and is now at a support level at $112.50 and the 50 day moving average around $111.75.  We are going to keep an eye on this support going into the close today and will let you know if we do make a rotation to short.  Below are a couple charts for info.

Below is a support line chart for the SPY.  As you can see there is very little in terms of support if it cracks the support here at $112.50 & its 50 day moving average (around $111.75).

Next is a 10 day chart sampled at 60 minutes showing the trend line.  As you can see the uptrend was broken and then this morning the trend line rejected the upswing.