The drop in the indices of that past two days “feels” a lot more dramatic than it actually was, probably because the idea that stocks actually fluctuate which includes the occasional down day had been forgotten. It could certainly get dramatic from here, but the S&P would have to close below 1392 to trigger an intermediate term sell signal.

There are potential “buying tails” (signaling rejection of the lowest extremes in price action on Thursday) forming in the four primary stock indices and if the indices are able to hold Thursday’s day session closes for a few days it will be bullish and signal a rally right back to test or exceed the recent highs.

At this point Thursday’s lows are critical to the near term prognosis for the stock indices.