As discussed for the last two weeks, the structure of the Stock Indices was weakening, suggesting some type of top was forming. Now, the trend has turned lower. Obviously, this is a greater degree time and price correction to the years long rally. This should produce a tremendous buying opportunity when a bottom is formed.
Near term, the Indices worked off an extreme oversold condition in today’s trading. While there is still a chance for a continuation of a pause in the downtrend, the higher probability based on price development and structure is for at least another leg lower.