I did not see a headline that triggered the whoosh down in the Emini S&P 500 (ES) from 3410 to 3375 during a 20-minute period mid-morning Thursday, but the suddenness of it is typical of the end of a recovery rally within an incomplete DOMINANT near-term DOWNTREND.
ES leaves behind a potential double top at 3414 (Wed-Thurs), which now becomes the line in the sand for the bears.
The index's double high at 3414 is juxtaposed against the intraday lows at 3364.50 (overnight low) and 3369.75 (11 am Eastern). Whichever side of the range is violated and sustained has potential to trigger a 30- to 50-point move in the direction of the breakout.
As of this moment, in that the bulls were stopped in their tracks at 3414, my bias is to the downside, for a break of the 3364.50-3369.75 support zone later in the day. Last is 3383.00.
Mike Paulenoff is co-founder of MPTrader.com, a live Trading Room featuring his analysis on the key key market indices and bellwether stocks & ETFs.
