The indices have FINALLY tipped their hand and are giving signals of an Initiative move lower. As long as the indices do not close above today’s session highs (highlighted on the chart below), the working assumption is they will continue to have a downside bias for at least several more days.
Evidence supporting this conclusion is:
- The indices had formed extremely narrow ranged Balance Areas and were “ripe” to transition into Vertical Development
- The technical picture was also “coiled” and suggestive of an imminent sharp move
- Volume this morning is the heaviest it has been in quite a while
Downside KRAs that could prove to be at least temporary support are also highlighted on the chart below.