The S & P fell to, and held, the previous sequential low of 1088, which is coincident with its 10-week moving average at that same level. While this is important technical support, I think it is rather obvious that the uptrend was broken and that the market failed after several opportunities to move above its June intraday high of 1130. Anyone that did ratchet up their stops was probably taken out. There was nothing to be optimistic about in yesterday’s action. The weakest groups were led by the Banks and were all economically sensitive sectors. The top performing groups, even though down, were all the most defensive of groups, including non-durable Household Products, Telecomm, Food, Beverage, Tobacco, and Utilities. Earnings season is behind us, and what little is left, i. e. Cisco, is of no help. Looking forward, housing and jobs data are not expected to improve. Q2 GDP should get revised down after that June trade deficit report. Economic growth has slowed in June and July, and that’s the data we’ll be seeing for the next month or two. So who can we call on for help? The Fed shot its wad. Congress has no intention of cooperating ahead of elections. This was our reasoning for turning more negative in August and now the technical supports have given way. Even if we get a bounce off of 1088, it should be sold into. The August high is in place. We are now looking for a “test” at or above the July low, S & P 1010, by October. Maybe we’ll consider getting bullish then.