As discussed in Thursday’s Briefing, the higher probability was a continuation of Thursday’s selloff on Friday. That is exactly what occurred. However, some of the Indices have reached very important support levels. If those levels are traded through and close below them, it would suggest the possibility of a greater degree time and price rotation lower is developing. Holding above those levels would place a higher probability on testing the recent highs.
At Friday’s close, the Indices were approaching oversold territory, but it does not preclude them from trading lower to an extreme oversold condition where we have seen rotations back up. If there is a low put in below Friday, watch for internal divergences. This will suggest the end of the move down and a countertrend rotation back up