Ok received the confirmation a bit late, market wanted to trick some of the players but 1008 held for now - Low is 1010.91 - close enough for me.
The channel picture from before got a perfect touch on the lower trend line with nice bullish MACD divergence. I am a bit hesitant to add more longs but depending on the afternoon session I may add to existing long positions. We are not out of the woods yet as volume on this advance here is quite low - meaning we are not seeing much short covering of buying in comparison to our selling pressure. What I am looking for next for the day is a TICK in the +1100 range with the SPY 1-min chart showing a minimum of 2+ million shares traded (per minute) as part of a 5-8 pt buying "spree". This would be the final confirmation for me to add to longs.
In the mean time, playing it very careful still. EURUSD saved the market from collapsing today, and USDJPY hit an important support range in the 87-88 range. I have to admit I did not expect 88 to break there, nor did I expect us to reach 1010 this soon. As a result of this accelerated time frame it is still very possible that price targets on the downside are not yet done. As you remember I trade time quite a bit, so we still have 2 weeks left before we are supposed to be at our first bottom - could this be the "crash like" bearish scenario we had identified two weeks ago? Still very possible but at this point I am looking for upside in the markets at least for the remainder of the week.
As I am typing this I see TICK making new highs but no volume confirmation quite yet. Overall the low should be in and only capitulation like volume (check SPY 1-min chart again with 5 bars above 3 million on the downside) can bring it lower.
12:12PM: ES 1009.50-1010.50 needs to hold here, this would be a nice retrace to indicate a new wave structure if our low today was a short term bottom. IF we do break 1009 ES today we should drop below SPX 1000 briefly (but with a close above 1000) as we will get forced selling. That means a potential of another 15 points today again (intraday low of at least 30 pts down). Probabilities are very low at the moment for this BUT a break of key price levels will bring this as a 70% scenario. So be careful if you knife catching like me.
12:39PM: +1151 tick as expected. We should now see our volume confirmation soon with some big buyers stepping in.
12:43PM: there it goes again, we got our "8 pt" buying spree, strong volume in 2+ million shares on SPY in one minute and of course our TICK. Could not have worked out better here =)
12:52PM: I am going out on a limb here, IF and thats a big IF this is a real bottom, we will close above 1040 today, if we close between 1033-1040 we should have a GAP up tomorrow to open above 1042SPX. I would almost dare to say we are getting to 1040 today.
