On February 5th I wrote, “S&P 500 (SPY) I’m going out on a limb to say that 254-56 is the place to start buying again.”

This was after the epic call for the correction I made on January 23rd, “What I discovered today, will unequivocally help you determine if not the top of the market, at least a major inflection point for a correction.”

SPY at that point closed at 283.29.

So, now that we have fallen from the top of the tree, limb by limb, to 254, are investors bruised enough?

The massive reversal of the formerly complacent, to totally wacky volatility (VXX) index, created significant damage.

Which is why the 200 DMA is a line in the sand institutional investors use.

Hence, the expected buyers at 254 (its 200 DMA) did indeed come in.

Meanwhile, our antique military bush helicopter that was sent to rescue the bulls at the top of the tree, crashed to the ground with few survivors.

Now that 254 is holding, can the bulls salvage themselves and an old helicopter?

The biggest issue for this week will be whether the test and the bounce from SPY’s 200 daily moving average holds.

After all, the first time a technical point gets hit, is not always the charm that a third test often turns out to be.

Checking in with the Modern Family, I go with our Wonder Woman, Semiconductors, first.

SMH came darn close to touching the 200 DMA. However, it confirmed the breakdown of a key weekly moving average that until last week, held since November 2016.

Late on Friday, I read that block call option buying came to buy SMH.

That makes 92.75 (the 200 DMA) key support and 100.10 key resistance.

Biotechnology (IBB), in a Distribution phase and much weaker than his superstar sister, held last November’s low at 100.68. Biotech, as the premier speculative sector, now needs to prove itself again.

We are not expecting IBB to fly like a new fandangled helicopter, but an old relic with a facelift would be nice.