S&P Index has been down four (4) consecutive sessions giving up approximately -3%, which can be classified as “normal” pullback. Past pullbacks of this magnitude have resulted in a “relief rally” of about 1%, so conditions are in place for that to occur…remain vigilant.

Today’s “key marker” will be 1641.00…which is 40 handles from breakdown level of 1681. Further violation of this level with renewed selling could force additional long liquidation, so it is critical that some price stability begin to occur.

Today’s Strategy we’ll be looking for evidence that recent selling has abated and bulls regain some semblance of control…Price action must generate a new swing high above 1648 which would be an initial sign of strength. Prior day VTMP 1649 – 53 marks initial supply zone which must be overcome for any higher price potential. Beyond this zone we’ll update higher price targets in trading room.

Violation of 1641 calls for reassessment of relief rally scenario with multiple lower targets pushing as far down as 1631. Live updates in the trading room.

Good Trading…David

Habitude Seven
I take the long term view. I am willing to lose in the short term. I understand that losses are a necessary cost of doing business, like inventory to a merchant. Drawdowns are viewed as temporary. I realize that my wins and winning periods are part of the broad process. Each trade is but one in a string of trades. What is happening now is one piece of a much larger puzzle. Because of this I do not get overly euphoric or despondent.