We’ve been expecting this sell off for the past few weeks, and have been discussing it in previous blog posts and in Deep Practice. We’ve had two strong trend days to the downside over the past two trading days, breaking down below the 1395 pre-election support level.
Since we are now oversold, we may see the market try to hold in this area tomorrow. If it does and that starts a rally, I would expect the rally to be short-lived and be unable to push much above 1395.
I see more downside ahead, which could come tomorrow or early next week if the market can’t muster much of a rally. I would expect the 1360 level to hold – at least temporarily, on any further push down either this week or next. Then we will see how the market responds.
Thanks Dr Gary, so nice to get your posts – gives me positiveness in my trading!