You may ask why was I so reckless? Well, I really expected that we keep this GAP open for a bit longer and run into the 110X SPX range first especially after breaking 1095 on a cash basis consistently without strong reversals. I know it sounds like an excuse and hindsight a break of yesterdays low of course made it obvious that the GAP would likely be filled. Sometimes, being glued to the screen and trading on "impulse" can burn you. While it was just a few points (due to tight stops) its still frustrating having giving up money when there was clearly no long trade until the GAP was filled.
Back to charts, we just hit the perfect 23% retracement with our low today which makes this a W4 and opens up the price range towards much higher prices.
Now on the long side it is very possible that we shake out some of the weak longs first here and make a marginal new low around 2 pts lower early afternoon. This should come with lower sell volume and should be followed with a strong reversal. On the other hand, if the LOD is in we will see ourselves back at VWAP by 1:30PM or a bit earlier even. Getting back to VWAP would be quite bullish and validate that our LOD is in, at least for the day.
11:18AM: Look for tick confirmation here. Considering that we had a -1200+ tick today, we need to get at the minimum an equally strong tick on the upside (1100+) as another confirmation for LOD. Market is being helped by EURUSD here so any weakness there could spell more trouble and further downside. Considering EURUSD is up substantially already its a bit difficult seeing how upside can develop without FX support.
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