Since the Stock Market hit its lows in March of 2009, every single dip, heading into this week, has been a fabulous buying opportunity for the $SPY. Even more pronounced has been the dip buyers since the November 2012 introduction of Abenomics. Until the middle of October, the Abenomics trendline remained firm with prices respecting it and promptly bouncing with each test of the trendline. In October when prices fell below the Abenomics trendline - Abe got pissed and stocks mounted the V bottom price recovery that all other V bottom recoveries will be compared to in the years ahead.
After yesterdays wild session which saw stocks mount a Walking Dead rip your face off rally to start the session, only to die into the closing bell, we find ourselves swiftly approaching the Abenomics trendline again.
Stock futures were plunging this morning but have since started embarked upon a methodical bounce pre-market. Are stocks setting up for another October like plunge?
I'll be watching closely. If $SPY does break the Abenomics support, I think it will be tougher to get back over that support line this time around. Today's trading action will likely define the medium term picture of the stock market.
That $203 level will be the barometer. Here are two charts of the $SPY with the Abenomics trendline in focus.