ANALYST: The Stock Market Is At A Critical Juncture

Krinsky points out that yesterday, the index was sitting at basically the same levels as last Monday, despite gyrations throughout the week.

In a note to clients yesterday, Krinsky wrote:

As a result, S&P Futures appear to be at a make or break juncture, in our view. The continuous contract, ES1, is testing the rising trend-line off the November 2012 lows for the 4th time. A clear break likely sets up a re-test of the August lows, around 1625, or more than 2% lower.

Of course, the bull thesis here, is that we have yet to break last week's lows (1663.25), and the recent pullback to trend creates a nice buying opportunity. Assuming we use those lows as a stop, we cannot argue with the risk/reward at this level. First upside resistance would be in the area of the Thursday and Friday failing rallies, or 1685-1686.

Overnight, futures did break last week's lows, but just barely - falling to 1662.75. However, this morning, futures are right back up at that 1667 level, where they were yesterday as well as last Monday.