The ENQ (Nasdaq 100 mini future) and the TF (Russell 2000 mini future) gave intermediate term sell signals at the close, closing below levels previously discussed in our October 4 Blog Post. The ES (S&P 500 mini future) and the YM (Dow mini future) have not confirmed by closing below levels mentioned previously.

The fact that the Nasdaq, which has been the lead horse of the bull run of the past 3+ years, has been so weak lately makes it probable that the ES (S&P) and YM (Dow) will follow lower and give confirming intermediate term sell signals. The broad based Russell 2000 (TF) is also extremely weak, providing evidence for the bearish case.

We expect to see immediately lower prices. If prices do not follow through immediately, any retracement/consolidation should not retrace substantially into Tuesday’s range.

We are wrong in our present analysis if the indices bungee jump back above Tuesday’s highs in the next day or two. We don’t expect that to happen, but this market has had the most persistent underlying bid of any market we have experienced in twenty-eight years of trading.