Ari Wald, a chart-watcher over at Brown Brothers Harriman

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We have compelling technical reasons to believe that the low in the S&P 500 is likely set for the year. The combination of a key reversal day at 1100 (38.2% bull market retracement) confirmed with lesser intensity and subsequently strong buying power, oversold and pessimistic conditions, the likely completion of a 5-wave decline since May, and improving seasonals are supports for a year-end rally. October lows tend to precede year-end strength, and we too expect a countertrend rally to develop. Our upside expectation for this multi-month rally is to 1230-60. Key retracements from the decline since May, the September peak, the neckline of the Head-&-Shoulders topping pattern, and the 200-day moving average – all converge in this zone indicating formidable resistance.