S&P 500 Index (SPX) — Our indicators and charts are telling us that the market is testing its support at Dow (DJI) 8,000 and S&P 500 (SPX) 800 and they are telling us that the chances are that the support will hold.

But the indices have broken down from the support line of the eight-week channel up and that is not good. Several days of low volume and an even greater increase in bearish sentiment would help, but high volume on the downside with a crush of the support will likely send stocks to new lows.

What should we do? Wait and let the market’s compass show us the next path to take.

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Sam Collins is a registered, fee-based portfolio manager who may be contacted samailc@cox.net. You can also check out an archive of some of his most recent market outlooks by clicking here.