In the September 29 Briefing I warned of the extreme divergence between price and structure of the Stock Indices. There were glaring signals of an impending fall. Since, then I outlined last Thursday to expect a counter trend rotation to work off an extreme oversold condition. That is exactly what occurred between Thursday and yesterday, allowing for another leg to the downside today.
My analysis showed the higher probability of at least one more leg down, due to the way the countertrend move developed. However, I did not expect the extent of the move we saw today. It was very impulsive and suggests we will see additional downside tomorrow. Because markets run and pause in all degrees of time, I have to expect we are reaching another possible pause phase. Once again, the Indices are extremely oversold. The first hour of tomorrow’s trading will be very important.
The Briefing outlines what to look for, if at least a short term bottom is reached.
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