The bull setup yesterday looked too good to be true, and it was. There hadn't been a significant move down in the last two years on the first trading day of the month after a gap up from the previous close, but we had a trend day down yesterday regardless. Kudos to my bullish EW friend Pug for calling the high and reversal.

So where does that leave us today? Well the support trendline on SPX wasn't breached, so the rising wedge on the SPX daily isn't yet breaking down. If it does this will start to look very ugly on the bull side:

Encouragingly for the bulls though a new low wasn't made either on SPX or on ES overnight, and the 60min RSI on ES and NQ is showing some positive divergence, which suggests a bounce today. You'd normally expect a two to five day retracement after a trend day down in any case unless the market is extremely weak. Here's how that looks on the ES chart:

I'm watching copper carefully here for a directional signal. Copper is forming the IHS that I've been speculating might form for the last few days. It may yet break down from this, but a break above 253 would look extremely bullish for copper, and for equities too:

I thought I'd make a change and post some thought-provoking individual equity charts today. The first one is my AAPL weekly chart, which I've been seeing as a possible top signal for the wave up since July. AAPL is very heavily dependent of Steve Jobs' precarious health though, so it might not make the obvious target:

The other two charts are charts that I posted a few weeks ago when they broke broke rising wedges. I marked the likely bounce levels if the wedges were evolving into rising channels and they both bounced there, but what they've done since, and their bigger picture patterns setups, are interesting. The first is AMZN, which has gone on to break down from the rising channel, and looks ready to fall considerably further:

The second chart is for GS, which like AMZN also hit a significant resistance trendline from 2009 at the top of the shorter term rising wedge, albeit a declining resistance trendline in this case. The now very well established pattern on GS is a broadening descending wedge, and if the current rising channel breaks then the obvious next move is to wedge support at slightly under 100, though it might first form an HS pattern with the neckline at 165:

Overall the bear case looks stronger today, and if the support trendline on SPX can be broken I'll start to take it very seriously even though the end of QE2 is still over three months away. Until then this looks like another dip to be bought. I'm expecting a consolidation with a modest bounce today regardless of overall direction.