As we mentioned a couple of weeks ago, the $117 level is likely going to act as a magnet. In fact, with the ferocity of the decline today there is some potential that we will see the SPY make an intraweek low as far down as $113.
After the scary shakeout dip in the morning session where the VIX spiked as high as $42, buyers stepped up to the plate and defended the $117 20-year trend as we predicted they would. The VIX sharply plummeted back to $33 and the SPY rallied to close back above $120.
It’s doubtful the bear has had its last growl, but it is certainly very likely that an important multi week bottom is now in place that will offer some great long side opportunities.