A bull-trap opening greased the skids for the nasty plunge that followed. It caught bulls and bears with their pants down, so there’s likely to be follow-through on Thursday. If the selling breaches the 266.00 midpoint support decisively, brace for more downside to as low as 257.41 over the near term. Mechanical shorts can be attempted on snapback rallies to the red or green line, but I am not recommending bottom-fishing with the usual tight stop loss because the A-B impulse leg is low-quality, having failed to surpass any interesting prior lows. _______ UPDATE (Sep 24, 9:20 p.m.): The short trade played out on Thursday exactly as I’d mapped it the previous night. If you did the trade, please let me know and I’ll establish a tracking position. In any event, half should have been covered on the selloff that followed DIA’s brief pop above the green line.
DIA – Dow Industrials ETF (Last:268.06)
