An update on yesterday's charts

The market suffered another significant decline with the S&P 500 down 1.71% on the day.  I'm posting updates on the two charts I posted yesterday so you can get a better perspective on the decline.

The Dow Industrials broke down below the green dashed support line I spoke of yesterday:

(click on chart for larger image)

The red circle shows where we closed today.  We're below the 50 day moving average and broke the long term support line going back to March 2011.  The momentum indicators suggest we're deeply oversold and due for a bounce.

Here's the weekly chart of the Russell 2000:



The weekly chart isn't as ugly and the purple arrow highlights today's price action.  We would need to break down below the blue dashed line to get really negative on this market.

As I said above, we're deeply oversold and due for a bounce.  I don't see any news tomorrow that might be a catalyst for the bounce although Alcoa's earnings announcement after the close today came in better than expected.  We have an Italian bond auction which might provide a surprise but I wouldn't hold my breath.  Thursday brings the weekly Jobless claims report which may give this market a boost.

We'll know a lot more on why equities are correcting by tomorrow's price action. As of this writing I'd be happy with a flat day but if significant selling continues that means Euro Zone problems are coming into focus.  I'll have more tomorrow on this and why Gold showed some strength the last two days ...