Overnight the market rises towards the Buy signal line and opens at the important 2680 level. Failure at this level and then subsequently also at 2660, initiates a sell sequence that ultimately finds the market 60 points lower, before a short-covering rally into the close.
An S/T Sell Signal is triggered at 2644, and a cover recommended at the or prior to the close as it is likely that the market will attempt to recover from the selling.
Yesterday's move down displays similarities with 02 February and 19 March with the market penetrating the Mid-channel in a decisive manner after a sequence which looks a bit like a megaphone – range expansion and dropping away.
On those 2 occasions we saw a bit of a bounce followed by a much deeper and significant low, presumably as the market resolves the problem that it is having with the current price level, and of course providing those with deep pockets the opportunity to buy at bargain prices.
And so, I suspect that we shall see some kind of bounce or recovery that those who didn't sell yesterday will sell into. Failure of that will trigger further selling, and then maybe we will see another move down to the lower extreme and to the pivot level at 2538.
The last few days selling comes at the recent projections for highs from the recent T structure and DB structure and the size of yesterday's move suggests that those structures are now complete and we should therefore look for a new structure to emerge.
Some strong target support lies in the 2510-2530 level and also in the 2530-2460 level, where the market may need to establish a deep low to form the next new large T structure.
Be prepared for whatever is coming next, and trade with confidence:
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Disclaimer: This is the diary of a personal trading system, its methodology and the signals that it is producing. You are welcome to follow along but please understand that the information presented here is for educational purposes only. No recommendations are being made to buy, or sell stocks, options or futures contracts. Please consult your own financial advisor before making any investment decisions.