We appear to have taken out support that would prevent us from going straight to our target zone which is 1250-1265 on the cash. From experience, if the zone on a selloff is 1250-1265.. we will probably hit 1245 or lower intra-day before this selloff has a CHANCE of being done.
I'll jump right to the charts tonight.
Here's the S&P hourly, I couldn't really find a way to create support with a trendline that showed we had some support for an oversold bounce. We just appear to be heading straight to the zone;
S&P daily, we have 2 trendlines converging on support at 1265 and we also have the 200dma at 1250. Those 2 areas of resistance create our target zone for the most likely place for a major bounce or potentially ending the selloff;
The Russel 2000 is still in it's megaphone pattern and looks to be targeting the bottom of that megaphone. There's nothing really to stop it from going straight there;
And the DOW, which is surprisingly the most interesting at the moment. It is BARELY holding some support here. If it loses that support it could lose about 500 points in a hurry as it is a lot further from the 200dma support than the S&P is;
So in conclusino of all that, it looks as though we are just going to head straight down into support here. The DOW it appears will be taking the brunt of that pain while the slide in the S&P and Russel will not seem as bad.
We absolutely could bounce at any time, because of the nature of being constantly very oversold. That's how these selloffs go though, you have to be on your toes. The best thing to do is just watch the S&P during the day and look for a higher low and higher high, if you see one, get out and wait to see what happens. Getting caught in the ripping bounces if your short is not fun, but leaving too soon or getting caught up in how oversold we are can lead you to the sidelines and miss out on the big moves to the downside.
Bear markets are difficult to trade, that's why they are known for hurting both bulls and bears.
GL
CJ
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