Tuesday’s trade included a somewhat convincing rejection of the buyers. The ES initially saw a quick upside move on the opening bell which was followed by several rounds of strong selling from the ES. It appeared that the market would build on the downside move and start heading down towards 3850. And the sellers stayed in force taking for the balance of the session.
I’ve labeled the move off of the 3639 low as an a-b-c. What sits atop the “C” has yet to be decided and I need to allow the market to tell us rather than the other way around. That being the case – for tomorrow, we need to continue to allow for the upside to begin again. Should that be the case, the moves themselves need to be more of the “take no prisoners” type – and get back above the 200 MA’s and on up and above the 20 and 50 MA.
Additional breakdown should result in a clean break below the 200 SMA which is at 3782. Once it does happen additional pressure may create a round or two of acceleration. Support comes in at 3800, 3782, 3745, 3735, 3693, 3639, and then 3600 to 3500.