The chart shows bear-market price action going back to January, but it is the last 20 or so bars — more specifically, the corrective abc pattern they describe — with which we need concern ourselves. My bear market target has been 129^03 for quite some time, and this is notwithstanding the recent, strong bounce from 129^28, just above it. Since the occurrence of a major low would have significant implications for all other classes of investable assets, we should be alert to this possibility.

In practice, this will entail monitoring midpoint supports of patterns such as the one I’ve labeled. Notice that the bottom of yesterday’s sharp selloff came within three ticks of the p midpoint support (i.e., the red line).  This is the ‘right place’ for a bounce to have occurred if the long bear market is indeed near an end. However, that would not be confirmed until such time as the bounce ‘goes impulsive’ on the daily chart via an unpaused thrust exceeding 135^02 (the point ‘A’ high of the downtrending ABC pattern).

My gut feeling, however, is that the futures will go a bit lower, to at least D=128^09, before they carve out a major reversal. More immediately, and from a trading perspective, the September futures became a coin-toss following the slight penetration of the 130^28 midpoint support. ‘Camo’ traders can play it either way, although my preference would be to wait for an opportune short. This implies initiating a trade at either the ‘p’ or ‘d’ of a minor rally target, or at the ‘x’ trigger of a downtrending abc on the 15-minute chart or less.