If you have been following the markets recently then you may have noticed the volatility in the S&P 500 (SPY  ). With North Korean tensions and a President still adjusting to his new job the markets have seen some volatile days in the last two weeks. When this sort of thing happens it usually causes question among the short term trader, along with those invested for the long term. As of last Thursday the SPY had officially broke below its uptrend that started back in November of last year. The question everyone is asking is "is this the beginning of a pullback?" So let's look at a few scenarios that may fit your concerns.

If you are a short term trader then there is no ignoring the break in this trend. For months and months the SPY has trended higher with every pullback to the uptrend being bought, sometimes immediately. Technical traders have been eying this uptrend line for some time now and with the break of this trend it forces them to look for the next support. To find this they will go back to the last area where the SPY bounced with volume that was above average. This happens to be at the $240 number. Many will argue that a bounce from there means that all is fine with the world again and that the pullback was news driven and not fundamentally driven.

For the long term investor we really need to look at the scope of the pullback. For now it's just a few percent off its highs so this does not concern the long term investor. The level of gains one has achieved after participating in this market for even a few years is so great that a few percent isn't going to bother. The focus for the long term investors will be on how the short term support areas are handled from here. If each short term support area keeps having problems holding then this may be warning sign. For now the long term investor is left to sit back and hope that these little pullbacks continue so they can add more to their positions.