This is the update of my May 17th post.

In the short term, daily bars chart, the S&P 500 is still in a downtrend since it has been breaking supports while holding resistances, which is the Midas definition of a downtrend.

It is possible, though, that this downtrend may have bottomed last Tuesday, the day of that classic Hammer candle which often marks a bottom.  Furthermore, that day price bounced up off a relatively minor calibrated support curve.  For another indication, look at the top pane of this chart, the Money Flow Index, which is really the volume weighted RSI.  It is well known that trendline analysis done on the RSI itself can often be a leading indicator, and here we see that its down trendline (blue) has been definitively broken to the upside.

We won’t know for sure if this downtrend has ended unless and until price breaks above R3.

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