For the past few days the SPY’s were trading in a fairly tight and narrowing range. Traders were waiting for them to breakout from their narrowing range. Yesterday afternoon the sellers overwhelmed the buyers causing a break to the downside. The 89 support level was broken with force. In after hours action the SPY’s traded down an additional 2+ points. This morning they are 1 point below yesterday’s after market action. My bias is short now. This doesn’t mean that I will indiscriminately hit the bids on the Open. I will look for inflection points to develop and trade with a short bias off of those points.
If the market attempts to bounce I will look at 85 and 85.85 as potential resistance. 84 is potential support but the force of the downside momentum in the past 18 hours leads me to believe we could have a significant move below 84.