Retest of the resistance and failure led to a liquidation move. Breaking the recent wedge added to the downside momentum. Since the move happened off the top of the balance it got exhausted half way to the stronger support. The buyers took advantage of that and pushed back. The market closed at the inflection point. Ideally, we should see a reaction and continuation to the downside to retest Friday's low and potentially reach the support. Watch for a double bottom first.
Whether we see the beginning of a bigger correction or not remains to be seen. Before the mega tech companies are done with the earnings and FOMC meeting announcement it would be low odds to see a big change in the market structure.
A few high level scenarios are outlined on the chart. The market may choose to deliver something in between especially waiting for the outcomes of the above mentioned events.
Day traders would find opportunities on both sides regardless of the scenarios.
10/20/2019
Whether we see the beginning of a bigger correction or not remains to be seen. Before the mega tech companies are done with the earnings and FOMC meeting announcement it would be low odds to see a big change in the market structure.
A few high level scenarios are outlined on the chart. The market may choose to deliver something in between especially waiting for the outcomes of the above mentioned events.
Day traders would find opportunities on both sides regardless of the scenarios.
10/20/2019