The markets cracked under selling pressure as the bears greatly overwhelmed the bulls and stopped out all of those who were who lured back in following yesterday’s rally (bull trap).
Due to the fractal nature of price, all large sell-offs begin as small sell-offs and so we’ve been watching the weekly lows to break on the indices to spot a potential larger reversal.
Today we got that break on the SPY, QQQ, and DIA with each now trading below last week’s lows. The IWM is still trading above its last week’s lows however it is currently trading in a failed momentum pattern.
DIA looks especially weak triggering an inside bar reversal down type pattern on the monthly chart and is also trading below it’s quarterly open.
The lows from March are now the pivot in play.
BA as the highest weighted company in the Dow isn’t helping matters after catching a downgrade and going outside inside and down on the monthly chart.
If you failed to get short today don’t fret and don’t chase.
The short-term and intermediate trends are now down.
Continue to watch the SPY, QQQ, and IWM to see if they can also trade below their quarterly opens.
If we have a confluence of all the indices trading below those quarterly opens then everything is in place for even greater selling and all pops can be comfortably sold.