While the S&P 500 held support at January low (1,812) yesterday (and October 2014's Bullard bounce lows), BMO's Russ Visch warns "it may not hold in the days ahead" due to weak market breadth.
Given the ongoing collapse in market breadth (now breaking well below January's lows), BMO's Visch adds...
...the probabilities still favour a breakdown in the days ahead given the continued deterioration underneath the surface in broad measures of equity participation. For example, both NYSE Advance-Decline lines (traditional and common-stock-only) have broken below their January lows.
The same is true for other indexes such as the Russell 2000 and Wilshire 5000 indexes.
Daily breadth and momentum oscillators also continue to deteriorate so the path of least resistance still appears to be to the downside here.
As we have noted in recent reports, the next major support level for the S&P 500 on a close below 1812 is the February 2014 low at 1737.