Sensible Support

By -

If by some miracle the downdraft in the market doesn't terminate after its few minutes in the sun, I think the next stopping point is about 50 S&P points south of here.

1123-spx

There are a few reasons a level like this would make sense:

+ It's a major retracement level – 50% of the entire range from the 2007 peak to the 2009 nadir;

+ It's back to the neckline of that huge inverted head and shoulders pattern;

+ It's right near the ascending trendline spanning from March to present.

If we got down to that level, I personally plan to lighten up on almost all my shorts.