Last Friday the S&P 500 Index (SPX) fell through it’s major Twitter support level at 2020. This morning the decline continues without any support levels being tweeted below the market. All I can say is look out below. When no one is tweeting support it means no one is confident the selling will stop. That often leads to a waterfall decline.

Another discouraging thing I’m seeing comes from 7 Day momentum for SPX. It is currently confirming the down trend by making lower highs and lower lows. Investor sentiment has clearly turned bearish. Bulls want to see momentum turn back up and break the down trend line. Daily momentum hit a very negative -28 last Friday. This is often an oversold level so we have a chance of a short term low in the next couple of days.

On the positive side, the long term trend is still intact. Breadth calculated between bullish and bearish stocks on Twitter continues to move sideways, well above zero. This is due to only a slight deterioration in the number of bullish stocks and a slight rise in the bearish count.

Conclusion

I’m seeing short term bearishness, but no significant damage to the long term trend. Daily momentum is printing extreme oversold readings so a short term low could emerge within a few days.