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Good afternoon, traders.
In yesterday’s article, I discussed how I had been expecting that structure we were just in to be a triangle from which we might fall, and we did just that today, gapping under the 200-day SMA and then getting a decent selloff from that:
I also discussed how such a move may produce a much deeper sell than I think most might be expecting here, and if futures overnight are any sign, that may still be quite true. And all the lower targets and the path I discussed yesterday will still be intact. I don’t need to make any changes to any of that.
But, that said, there are a few things that are warning me here, and I will discuss these in the rest of tonight’s article, and I will develop an alternative that we must bear in mind.
In other words, I still like my original plan, but I also have enough here that if a big enough reversal emerges (say, back above the 200-day), I could easily call it a major low that could stick for some time, too. So, we’ll play things as we go along, and respond to developments as they emerge!
Futures are down sharply as I write this. But, in the event that it reverses the drop overnight, it is one of the most bullish things the market can do (a big overnight drop that recovers by the open has a very good track record of marking major lows). That hasn’t happened yet, but if it does, it’s a signal to us.
I hope everyone has a fine evening.