We were expecting some selling pressure this week. And, we sure got it. The S&P 500 is down 37 points, or about 1.3%.

Technical conditions are now slightly oversold. So, the market may try to bounce at any moment. But, any bounce from here is likely only to last a day or two. The market has further to fall.

Here’s an updated look at the daily chart of the S&P 500…

The index is in the process of retesting the low – near 2800 – from earlier this month. That’s an obvious support line. And, when we got close to that level yesterday, buyers stepped up and the S&P 500 bounced about 16 points off the low of the day.

All that really did, though, was prevent the various indicators at the bottom of the chart from dipping into oversold territory and creating the conditions from which a sustainable rally can begin.

If you look close at the various moving averages on the chart, you’ll noticed they have completed the “bearish cross” I wrote about last Friday. That’s a pretty strong indication that if the S&P tests the 2800 support level again in the next few days, it’s probably not going to hold.

A break below 2800 could lead to a quick move lower, down towards the next support level near 2750.

The good news, though – at least for short-term traders – is that if the market does fall further from here, then several of the various technical indicators are set up to create positive divergence on that move. That happens when the market makes a lower low, but the indicators make a higher low. And, that creates the condition for a more sustainable rally.

So, as I’ve been arguing all week, the intermediate- and longer-term trends for the stock market look bearish to me. The short-term trend looks bearish for a few more days. Then, we might get the conditions for a short-term, tradable bounce.

Best regards and good trading,

Jeff Clark

P.S. One of the best things about my Delta Report trading strategy is it allows my subscribers to make money no matter what the market does… a bounce higher, lower, or a move sideways.

And with the crash I see coming later this year, it’s more important than ever to ditch the “buy-and-hold” strategy. To learn how I set my subscribers up for triple-digit profits, and how to protect yourself from the upcoming crash, read on here.

Reader Mailbag

In today’s mailbag, a Jeff Clark Trader subscriber talks about Jeff’s presentation on Wednesday night…

Great presentation! It is a money thing right now. Hope to reload down the road… Jeff and his record stand almost alone. Thank you very much for the presentation, cheers.

– Jeffrey

And a couple of Delta Report subscribers thank Jeff for the service…

Wanted to first thank you for providing the great guidance to a newbie options trader. Since I joined your program in February, I have already paid for the cost of your yearly membership with mostly five option trades (although have upped that to six to make it easier to sell half to recover the cost of the trade).

It has been a fascinating experience and I am enjoying learning a new skill at age 74 from a world class teacher. Your explanations and setups are clear, and I appreciate your detail with the specifics of each trade you recommend. Many thanks from an enthusiastic subscriber.

– Stephen

Thanks for all you do each day for your subscribers. I am looking forward to meeting Jeff, and you all personally, sometime in the near term to directly thank you.

– David

Editor’s Note: Well, you’re in luck, David. You’ll have a chance to meet Jeff, along with other investing greats, at the second annual Legacy Investment Summit, from September 23-25. Read on here for more details.

How does the potential for a market downturn, or crash, change your trading strategy? What do you see ahead for the stock market?

Let us know how you’re trading, along with any other trading questions, suggestions, or stories, at [email protected].