It happened… last hour the S&P dropped and closed below that key trendline (the one off the March 2020) low that I keep talking about. The question will be if it remains below. So far, every break since March of 2021 has been recovered within two hours EXCEPT the break that took place on June 17th. At that time we had a break, and immediate recovery and then it gapped down to break it again. The gap down took 16 HOURS (3 trading days) to recover. So, if this is not recovered by the end of the trading day, a break that long has only occurred one other time.
Now with that said, the “one other time” the gap down just went sideways and then things bounced up. So, even when it broke it didn’t go anywhere. What does all this say to me? If we stay under this trendline into the close, it will create a situation that has only happened one other time since March 2020. It would cause me to believe that this break will likely sink further since an immediate recovery did not occur. At which time I would be looking to expand my bearish positions. At a minimum, I will continue to hold SDS through the weekend. Volume actually isn’t too bad today, so that lends some confidence to this move down. If there is anything else worthy of reporting, I will update. Otherwise have a great weekend and let’s see where she goes next week! Good luck in your trades!