Update - Tuesday's S&P 500 Daily and Weekly Chart:

http://stockmarketchartanalyst.blogspot.com/

Was today the beginning a a much larger sell off?...That depends of what kind of Earnings and Economic Reports we get the rest of the week, but some major damage has been done to the daily chart, and the weekly chart is starting to show signs of weakness too...

There is a lot of uncertainty in the markets these days with the mid-term election only a couple of weeks away, plus add to that the huge amount of uncertainty with the Mortgage and Foreclosure issues that are being debated on every financial blog and news channel there is...

Here is just one example of news put out today that describes how serious the situation is, and how this subject may end up being the catalyst for a huge pullback because of how devastating this could end up being to the big banks and mortgage lenders nationwide:

Pimco, NY Fed Said to Seek BofA Repurchase of Mortgages

Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.

http://jessescrossroadscafe.blogspot.com/2010/10/ny-fed-blackrock-and-pimco-pressure.html

And here is another story that shows the larger, scarier picture:

Mortgage Crisis Set to Kick Into a Higher Gear

Specifically, the question is how many mortgages were overpromised and overpledged -- sometimes two, three maybe five times, maybe umpteen times -- to back securities? How many fraudulent mortgage-backed securities now sit on Fannie and Freddie’s books? At the New York Fed? Who will be on the hook for those securities?

http://www.foxbusiness.com/markets/2010/10/19/mortgage-crisis-set-kick-higher-gear/

The daily chart shows the $SPX dropped 18.81 points today, and ended the day down 1.59%...It managed to find support at the 15 Moving Average/Parabolic SAR area today, but a close below the 15MA would be very Bearish...It's been able to successfully bounce up off the 15MA twice before since the rally started in late August...If it closes below the 15MA this week, the next major level of Support is just above 1130...Below that is one more level of Support at 1120. and then nothing in the way of Support all the way back down to 1040. from late August where the recent rally began...



The weekly chart is showing weakness in the CCI, and the fast line of Stochastics has crossed down through the slow line, and is still in very Overbought territory at 93...The MACD Histogram is showing a downtick already this week, but the week is far from over...The Histogram will move much quicker than either the fast or the slow line of the MACD itself...As I mentioned in this weekend's analysis, major resistance will be found at the 200 Moving Average...This recent rally looks very much like the one from February to April of this year...Too Far - Too Fast...With no pullbacks to setup an levels of Support...And look at how that turned out in May...In two weeks the index had given up all of the gains it took eleven weeks to get...I can easily see the same thing happening here if the right catalyst comes along and spooks the market enough...Is the Mortgage and Foreclosure debacle this catalyst?...Only time will tell...




(sorry about the split image of the MACD...I forgot to include it in the first screenshot, and didnt' want to redo the entire image again...)