That action caused the VIX to spike and weekly support to be tested.
With the spiking Vix, there are supports on the daily chart that can act as an area to support a bounce. But the weekly chart suggests a SP500 can go towards 1600.
The spike in the vix still suggests no complacency.
The catalyst for the market decline is not so straight forward. The US markets, and even the European markets, have held up fairly well despite the volatility of Japan. The few geopolitical events that can act as a "reason" for a sell-off include:
1. Syrian tensions growing. (Syrian will retaliate against the next Israel strike. EU ends arms embargo to the rebels and Russia provides arms to the Government. Seemingly no peace talks in sight.)
2. Turkey riots. A civic construction project turns to national outrage due to PM involvement. (A lot of people did not like the micro-managing of the PM or "dictatorship" quality.)
3. Continued China weakness. (Below is an overlay of the FXI and SP500 for Friday.)
(Tonight's weak HSBC PMI doesn't help. Its cracked below 50. Bit lower than the Flash data.)
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