ES (SPY) Probes and Pressures Key Multi-Month Support Zone

Although the e-SPU plunged beneath the lower-support boundary line of its Apr-Jun price channel at 2070, and although the index then followed through to the downside to slice beneath a cluster of its prior significant June pivot lows at 2061 to 2062, the selling pressure managed to abate just North of the most-critical recent low at 2050 established on 5/07/15.

That said, in the ensuing hours, the e-SPU has clawed above the aforementioned violated June lows from the overnight session.

What now?

Purely from a technical perspective, the fact that the index recovered sharply after a near 1% penetration of its lower-channel boundary is the first sign of a potentially meaningful low in progress.

That said, given the ongoing headline risk, we cannot and should not rule out another swoon or two in the upcoming hours that retests the overnight lows.

If such a scenario unfolds, and if the tests are successful, then the likelihood that the e-SPU has put in a significant corrective low increases substantially. MJP 6/29/15