Key Takeaway
The S&P 500 continues its downward trend; however, is consolidating in a "wind up" pattern that will result in either a near-term breakout to the upside or a breakdown thus continuing the major trend down. If it breaks up, we'll want to see the top blue line breached and eventually a break out of the red 50-day moving average. In order to confirm this is a true breakout with sustainability, we'd also like to see the RSI above 50 and the MACD above zero (two pink circles). In looking over the past year, you will see that if the RSI is above 50 and the MACD is positive, the market is more comfortably trending upward.
The chart below is of the Nasdaq, which has more exposure to growth related stocks. As you can see the two charts look very similar. 
Market Pros:
- The market is searching for good news.
- Institutional buyers are beginning to buy stocks at these levels.
Market Cons:
- Down-trend is still in effect and caution is warranted until we get a break.
- Short-term break outs within a longer term downtrend could be short lived. Close attention will be critical.