Monday’s selloff looks like it could start to snowball, especially given the feebleness of the short-squeeze in the final hour. It didn’t even start until 40 minutes before the bell, hinting that bears are not going to be as easy to stampede as usual. My hunch is that the futures will not improve much on the 2077.50 high achieved ten minutes before the close. I’ve used it as the point ‘C’ of a pattern that projects to as low as 2050.00 — equivalent to another 200-point drop in the Dow. Night owls can use p and/or p2 to bottom-fish or get short ‘mechanically,’ but C=2077.50 will need to be adjusted if the futures exceed that peak overnight. As always, an easy downside penetration of p, p2 or D would be warning of still-lower prices to come.
