Quick chart update here after this afternoons melt-down as there’s been some changes. As of writing though, the now routine overnight rally in futures is underway. My core support to watch was 4480-90 and we bounced about 7 points shy of it but given the volatility I consider this a hit. There is also a new channel formed in red at todays low, from the November highs, that is worth watching (chart below)
As of now price rallying off support - that 4490 area was support of the core rising channel from March 2020 (orange dotted) and as you can see, a new channel has formed in red. Given these supports, its quite possible bulls try a recovery that actually lasts a day or two from here. Main overhead resistance now is 4565 and this should backtest overnight or tomorrow. To prevent a repeat of the last week, bulls are going to want to either power right through with force, or pullback gently and flag (not retracing more than say 61% of the overnight rally), then power higher to next level up at 4610-15 (rest of lvls shown in chart). I think there is a good chance this scenario plays out the rest of the week.
BEAR CASE: If 4565 hits and rejects sharply back below 4515ish say its quite likely the lows get retested and we drop to 4435 next down, where I would certainly be a buyer. Bulls also want to watch out for level recaptures and failures - for example if we pop above 4565, hit 4610, then fail back below 4565, thats also a trigger to look out below.
As I say in every post, we are in a sell the bounce market, and remains so until proven otherwise. This means some levels need to reclaim, starting with 4565, then 4610-15. Bulls can start to breath some relief then.
Will post again tomorrow night
Great chart and levels. Market is oversold based on oscillators that short term rebound is likely. Thanks
Why 61%? Is that a fib level?