The S&P 500 Index is in a critical spot right now. After last Friday's huge decline it found support at its 50-day moving average. The S&P 500 climbed Monday and Tuesday of this week, cutting below last Friday's low on Wednesday then recovering to close basically unchanged, then yesterday climbing higher, turning back down, then going higher into the close to finish right at the 20-day moving average.
Continuing on yesterday's late strength, a VERY big day in Japan, we should see a positive open. The futures have backed off slightly b/c of the 4th Q GDP numbers coming in less than expected, (which could indicate to the Fed it was time to stop raising rates a few months ago, and not to raise rates again next week), but we should still see some early strength.
Critical support is the 50-day, and more importantly last Friday's low. If the morning burst is reversed this test could come sooner than later. Other critical levels are the January highs. A test of the January highs, 1294(ish), that is tested but not overtaken will lead to more sideways action unless the January, then December lows are broken.
We're still in a bull market, but the near term will show us if we're in for either more back-and-filling sideways action, a continuation of the uptrend or a more significant draw down to test the October lows.