Yesterday's index decline brought price right to key price support levels on the ES, YM and NQ dailies. While there are some residual timing low effects in place today, yesterday was also the major cycle low on ES and YM based on bar counts of prior corrective declines throughout the rally from the March lows. If these continue to decline throughout this week we can expect a more major downside correction (at least) since an “overbalance” of the timing factors would signify a disruption of the entire pattern of this rally.

The two most likely scenarios are: 1) The rally resumes from here and we start to see significant resistance breaks on 45 minute and daily charts as these head towards new swing highs. And 2) A temporary hold at support without resistance breaking on the 45 minute charts. Essentially if we don't see a pattern of higher highs/higher lows reassert on the 45 minute charts within the next 2 days and simply remain congested, it's more likely that we'll see a further decline towards the end of the week as the start of a more major decline. So the next 2 days are crucial to determining longer term trend.

ES Daily:

And 45 Minute:

A break above the 915.50 resistance would go a long way towards the rally resuming on daily too.

YM Daily:

And 45 Minute:

8486 – 8504 is key.

NQ daily:

And 45 minute:

1464 Key resistance.