S&P 500 challenging 200 Day Moving Average and Supply Lines

The traders are now challenging the S&P 500's 200-day moving average and the July 27 supply line. At the moment, volume on the S&P 500 Spider (ticker SPY) has the potential to post closing volume above recent averages and may be set to post more than 200 million shares traded.

Both the current price point and volume trends corresponds with the higher volume (237 million) swing point on July 27, as seen in the above chart. If the market can hold this level, we have see a counter trend rally maybe into the $142 price level on the SPY. If not, the market is increasingly likely to retest the May/June lows between $132 and $128.