On February 5th I wrote, “S&P 500 (SPY) I’m going out on a limb to say that 254-56 is the place to start buying again.”

This was after the epic call for the correction I made on January 23rd, “What I discovered today, will unequivocally help you determine if not the top of the market, at least a major inflection point for a correction.”

SPY at that point closed at 283.29.

So, now that we have fallen from the top of the tree, limb by limb, to 254, are investors bruised enough?

The massive reversal of the formerly complacent, to totally wacky volatility (VXX) index, created significant damage.

Which is why the 200 DMA is a line in the sand institutional investors use.

Hence, the expected buyers at 254 (its 200 DMA) did indeed come in.

Meanwhile, our antique military bush helicopter that was sent to rescue the bulls at the top of the tree, crashed to the ground with few survivors.

Now that 254 is holding, can the bulls salvage themselves and an old helicopter?

The biggest issue for this week will be whether the test and the bounce from SPY’s 200 daily moving average holds.

After all, the first time a technical point gets hit, is not always the charm that a third test often turns out to be.

Checking in with the Modern Family, I go with our Wonder Woman, Semiconductors, first.

SMH came darn close to touching the 200 DMA. However, it confirmed the breakdown of a key weekly moving average that until last week, held since November 2016.

Late on Friday, I read that block call option buying came to buy SMH.

That makes 92.75 (the 200 DMA) key support and 100.10 key resistance.

Biotechnology (IBB), in a Distribution phase and much weaker than his superstar sister, held last November’s low at 100.68. Biotech, as the premier speculative sector, now needs to prove itself again.

We are not expecting IBB to fly like a new fandangled helicopter, but an old relic with a facelift would be nice.

Clearly, SMH and IBB represent the strongest and the weakest sectors of the family.

Gramps Russell 2000 also touched down on the 200 DMA. IWM had huge volume and a possible reversal pattern.

Granny Retail (XRT) retested last Monday’s low and bounced along with everyone else. Also a major key, Retail, if holds 44.00, will help shaky consumer confidence and the overall market.

Then, there is Jim Rogers, dubbed legendary investor. He came out last Friday, for the second time since November, to say that “When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime.”

He’s focused on debt concerns. And he favors putting money on emerging markets such as Japan, China and Russia. Personally, I prefer Latin America (ILF), still in a bullish phase. Looking forward, should inflation set in, those countries are rich in raw materials.

The historic helicopter will most likely never fly the same way again. Therefore, as a pilot, my trading plan remains the same: lighten up on equities, watch the US dollar and interest rates. Plus, buy commodities once the dollar breaks back down under 23.50.

S&P 500 (SPY) 267.20 is the weekly chart breakdown it held for 15 months. If it can clear, we still have lots of resistance. If cannot clear, I suspect more sellers will appear.

Russell 2000 (IWM) 152 major overhead resistance. But, the longer it holds 144 the better.

Dow (DIA) 245.50 is the exponential MA that if it cannot clear most likely means selloff not over.

Nasdaq (QQQ) 158.00 is the weekly moving average that has not seen a week close below since November 2016. 155 pivotal.