Our comments past few days has served us well as we remained vigilant for a “sharp reversal”. Shortie having been squeezed out during early Bernanke testimony only to reverse sharply as “Uncle Ben” responded hawkishly to question regarding the Fed’s QE exit strategy. This sent Markets in a “GTFO” tailspin. Over night Japan plunged -7.3% as a confluence of factors forced selling.
Today’s trade strategy simply is to remain flexible and anticipate a somewhat volatile session. Projected downside targets on a break of prior day low (PDH) have already been achieved to 1635.50. The Monthly Pivot is 1634.25 so anticipate a “buy response” from any retest during Pit Session.
Prior Day Low (PDL) is 1646.50, so this should mark first real supply test. Anticipate increased volatility and remain disciplined to trade setups.