Market opens down huge, breaks lower, tests the lower extreme and initiates a very strong counter trend rally.
IF yesterday's low holds then we have a second low with bullish divergence and a new possible T structure centered on that low. We need to see some follow through above yesterday's high.
IF yesterday was just a reaction to the severely negative opening and the selling continues today (and Futures are indicating that this is likely), then we are still looking for a major low and price will continue lower until the current problem with price is no longer apparent.
Very dangerous market conditions continue. Trade below the 200 day moving average indicates, for now, that the volatility will continue and that we should trade accordingly.
Be prepared for whatever is coming next, and trade with confidence:
To receive detailed daily analysis, guidance and the updated daily Buy / Sell trigger levels being generated by the Trading the Line system before the market opens, and intraday alerts when appropriate, please become a Member and Sign up for Alerts & Observations – includes access to Members Area and the Explanatory Notes for all of the concepts discussed.
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.