It’s make or break time for the market. Sentiment for the S&P 500 Index (SPX) is sitting right on top of its confirming uptrend line. A clear break of this line would indicate that the bulls are retreating and the bears have gained control. It would most likely result in SPX falling below 2400.
Support and resistance levels gleaned from the Twitter stream for SPX show how critical the 2400 level is. Everyone is talking about 2400 and almost nothing else. There aren’t any clear support levels below 2400 so if it breaks we could see a waterfall type decline as everyone panics.
The recent weakness is finally having a negative impact on the number of bullish stocks on Twitter. This indicates that fewer stocks have enthusiastic buyers. The bearish count is still low, which means sellers aren’t materializing yet.
The market is at a critical point, 7 day momentum and sentiment is on the line between bullish and bearishness, there isn’t any clear support below 2400, and enthusiastic buyers are drying up. If the market can’t rally from here, it’s likely that 2400 will break and the decline after that will be swift.