This is the 60 min chart I've been posting since 30 July highlighting bearish signs that seemed to be appearing, warning of a potential end to the rally from the 1 July low (you'll find the most recent posting of it here) :
SPX 60 min:
These bearish signs seem finally to have played out in price action.
However, you'll see that we've now come down to the bottom of the first area of support at 1088 which is also the lower line of the downward purple pitchfork and the 200ma - not surprising then, with such a confluence of support areas that today's down move has been stalling in this area for a couple of hours.
The indicators may be signalling a bounce could be due - you can see them highlighted by yellow circles: the RSI is at 30 and looking like it might turn up; the MACD histogram looks like the latest two bars have formed higher lows; and the Slow Sto looks like its curling up from oversold levels.
These aren't necessarily buy signals (if tempted to have a punt on the long side, I'd drill down to a much smaller timeframe to find an entry with a tight stop), just perhaps warnings to be prepared for a bounce while these indicators work off their currently oversold conditions. If things are extremely bearish, they'll do that without much of a bounce in price, but its quite possible that they just stay oversold and price continues to tumble.
For the moment at least, price action and internals suggest that long positions are risky. Of course, in recent weeks, things have had a habit of turning around sharply just when it looked like a new downtrend had begun, so we can't rule out a sudden turn around.
When we do get a bounce, much will depend on the way it behaves - if looking for further downside, we don't want any bounce to look too impulsive. Of course, any corrective bounce needs to be in 3 waves and preferably, if today's low is wave (1) of [3], a bounce will not get too much above the 61.8% retracement level at around 1113. If its wave [4], then it has to stay below 1111.58 (the wave [1] low) and preferably it should stay around the 38.2% retracement level at about 1103.
Three wave bounces into these areas may be worth shorting given the internals, but of course, stops are vital in case the bounce turns into something more bullish. Of course, these levels will change if we drop further before any significant bounce, but you get the idea.