Wednesday, February 5, 2014

Another Selloff Nears

A plunge like Monday's usually gets us oversold enough to prevent further damage for at least 2 trading days.  Beyond that, in a strong pullback like we are in right now, with the amount of technical damage done, you can have another selloff continue after just a 2 day respite.  Which means trading long is probably safe today, but beyond today, you are playing with fire on the long side till we get the puke out move lower to ES 1720.

From a daytrader's perspective, today you have to buy the gap down open to sell at the European close, but I would not hold longs after today.  Thursday is lining up for another down day going into the nonfarm payrolls number on Friday.


MM111 said...

It's looks like there is support at 1740 and we could rocket from there.

Market Owl said...

I don't think we are going to rocket anywhere right now. The plunge on Monday did a lot of technical damage, and we've bounced weakly from that over the last 2 days. It tells me there is at least one more move lower before we can bottom.