As noted in the chart below, the S& 500 Index remains in a downtrend since mid-October 2007.
(click on chart for larger image)
However, given the intermediate oversold level of the S&P 500 Index, it is possible we could see a bounce higher in the market in the near term. The percentage of S&P stocks trading above their 50 day moving average is 10 percentage points below the level hit in March of this year when the market bounced off of a low. On the other hand, the percentage of stocks trading above their 150 day moving average is quite a bit higher than the level reached in March 2007 (see below charts.)
(click on charts for larger image)
The market's tone for Friday will likely be set by General Electric's (GE) earnings report at 8:30.