One can see from the TICK that short positions are favoured. But the significant bullish divergence in the number of stocks making new lows favours a more meaningful rally similar to that of this summer (where the prior reaction high got knocked out - even if in the end the S&P continued to tumble). The best case scenario here would be a rally all the way back to declining resistance in the 1,200-1,300 range.
It will take baby steps first; look for retest of 820 than rally to 1,000 before a another run at 850 before the final push to and beyond 1,000. I would give this a time scale of 2-6 months.
Lets watch and see what happens...
Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website