10:37 am EDT:  So far the shorts are in control, as the 927.50 50% retracement from the 932.00 interim high was sold off and we are making new lows as we write (921.00 low). However, 918.00 to 921.00 is the lower lower end of the current trading range and it could provide support.  The Nasdaq bank index is at critical trendline support, which could lead to a greater selloff if broken.  Accordinly, we urge caution with new longs.  When the NYSE advance:decline ratio gets below -5 (currently -8), we usually don’t see any kind of recovery until the next day or two, though sometimes an interim low is set close to the close on the same day.  Shorts can enter at 926.00, then 928.50, then 931.50.  Above that and we expect shorts to start covering.

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