Last week i posted that we are in a sell the rallies mode and the status quo remains. However, i personally have not sold any rallies so far, given the way the decline started - with a huge gap-down and no decent rallies to position short.
Although the exchange has busted all the trades below a certain treshold, what remains on the chart is a big wide range bar (100 points wide) on the daily charts. We should continue to see many inside bars within this wide bar range, for the next few days or perhaps weeks. The resolution out of this wide range bar will determine the price direction and targets for weeks to come. If we get a daily close above 1167, then we have seen a bottom today and we should head up to SPX 1270. If we get a daily close below 1065, then SPX 950 becomes the downside target. It is very easy to say the trend is down here, as easy as it was to say the trend is up, just 3 days back. The reality is we are in a highly unstable trading zone. I guess it will be lot's of fun as we whip around in this 1065-1167 area the next few days, before the market makes up it's mind. Trade safe !