As we anticipated last night, we saw additional follow through to the downside today. Today’s trading was not as clear as yesterday’s market, but trades were available, nevertheless.
After the market broke yesterday’s low, the two-day low (which was a bit lower) became the key resistance level. A short trade on the 3,000 Tick chart around 10:00 Eastern Time (first red arrow) confirmed by little Weis Wave demand led the market to new lows.
Later in the day, the market revisited the morning highs and set up another short for a retest of the day’s lows (second red arrow). Again, the Wies Wave showed a lack of demand at this level giving the go-ahead for a short.
The market looks like it got a little over sold today. While it can certainly go lower, watch today’s low (1382.50). This will be important tomorrow. We may hold above it and try to rally from there. Or, we may dip below it and come back up above it and hold. This would set the stage for a better rally. If we drop underneath yesterday’s low and continue lower, then it tells us we have more downside to go before buyers are willing to come in. I view the latter as the least likely tomorrow, but certainly possible.
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