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<p>The major US indices are closing sharply lower to start the new trading week.  Better than expected ISM -non manufacturing index, sent yields moving to the upside, the USD higher and stocks to the downside. </p><p>Morgan Stanley's Mike Wilson who called for a "tactical rally" to the 4100-4150 area, bailed on the rally idea today after the index reached a high of $4100.51 last week (Thursday). </p><p>In his note to customers on Monday said:</p><ul><li>"As predicted, falling interest rates at the back end have led to modest, further gains for this bear market rally. However, with last week's price action, the S&P 500 is now right into our original tactical target range of 4000-4150."</li></ul><p class="paywall-full-content text-align-left">He added:</p><ul><li>"While the index has modestly exceeded its 200-day moving average and the breadth continues to expand, the downtrend from the beginning of the year remains in place." </li></ul><p class="paywall-full-content text-align-left">He warned that:</p><ul><li>"This makes the risk-reward of playing for more upside quite poor at this point, and we are now sellers again."</li></ul><p>Although he does not rule out a final run up to 4150, he looks to the level as the "absolute upside" the index can reach.  He looks for a break of 3938, which is where the 150 day MA is found, to give bears downside confirmation. </p><p>Looking at the closing levels, the S&P is closing just below the 4000 level at 3998.83</p><p>The final numbers are showing:</p><ul><li>Dow industrial average fell -482.80 points or -1.40% at 33947.10</li><li>S&P index fell -72.88 points or -1.79% at 3998.83</li><li>NASDAQ index fell -221.55 points or -1.93% at 11239.95</li><li>Russell 2000 fell -52.61 points or -2.78% at 1840.22</li></ul>

                This article was written by Greg Michalowski at forexlive.com.