Both the SPY & QQQ bounced off support at the lows today as shown on these updated 60 minute charts. Based on the strong bearish divergences in place, a break below these support levels is likely to occurs the next time they are tested from above. The previous break below the 60 minute rising wedge on the SPY that I highlighted last week proved to be a whipsaw, i.e- a false sell signal with prices immediately snapping back inside of the pattern. Since then prices have continue to wedge higher on waning momentum, as evidenced by the lower highs on the MACD (a momentum oscillator) as priced pushed to marginal new highs. Based on my current read of the charts, I would venture to guess that the next test of the bottom of the wedge on the SPY, as well as the minor support level on the Q’s that was successfully tested at the lows today, will result in a break below those levels, with prices dropping to the next highlighted support levels. Note: the bounce off the bottom of the wedge on the SPY today also corresponded to a bounce off the dashed black horizontal support line which is connects the top & bottom of several recent gaps (that line has been extended in the live charts but not the static charts below).

*click to view the live, annotated 60 minute chart of SPY                                    *click view the live, annotated 60 minute chart of QQQ

*intraday charts are typically only viewable with a stockcharts.com subscription although non-stockcharts subscribers might be able to view these intraday charts by cutting & pasting the following url’s into the address field on their web browser (paste url & hit “enter”):

http://stockcharts.com/c-sc/sc?s=SPY&p=60&yr=0&mn=4&dy=0&i=p62784488955&a=359792442&r=1406306920112

http://stockcharts.com/c-sc/sc?s=QQQ&p=60&yr=0&mn=4&dy=0&i=p88050225330&a=360945467&r=1406305569722