Two of the three conditions we laid out to sound an 'all clear' last week have been fulfilled. On the positive side, high yield credit defaults swap spreads have fallen below 625 and are now at 574. The S&P 500 has closed above its 200-day moving average - our proxy for the primary trend - each day since last Tuesday, now appears decisively above it and the trend is still rising. Meanwhile, 10-year Treasury yields remain below 3.3%. Recall that we would like to see a rise above 3.4% as further evidence that global investors' flight to safety is abating.

David Fuller's view I feel that there are few decisive levels within trading ranges, which is what we see for most stock market indices today. However dynamic moves do sometimes occur within ranges and shortly after The Weekly View was released on Monday the S&P 500 Index closed with a downside key day reversal, as did the Nasdaq 100 Index.

Both have seen downside follow through today, confirming that a reaction is underway and this has taken the S&P back beneath its 200-day MA. The S&P and NDX must hold above their recent lows near 1040 and 1755, respectively, to avoid a deeper correction. Moreover, a rally back up above yesterday's key day reversal highs would then be required to reaffirm underlying support and scope for additional gains.