At about a 2.5% rally we still have a chance for the 3% day, which we have seen at least 4 of during the selloff. Yesterday was a horrible headfake for the bulls, and I am sure many wanted to give up and sold off when the action was so poor. I was tempted myself.
Below in picture form I am showing why I still see at least 15 S&P points (upper 1060s, if not 1070) before I will be selling much of anything. As I wrote earlier in the week in a perfect world we see a rally to the 50/200 day moving average area closer to 1100 where one could put on very low risk entries to the short side. If the S&P 500 is able to burst right through that area then one would need to reassess but the intermediate term chart does not call for that. So this is my general game plan and with the velocity of the market to both the up and downside it seems to be playing out over days rather than weeks.
This simply continues the same subranges we have been talking about for months now. The big range of 1040 to 1100, with 2 subranges: 1040 to 1070, and 1070 to 1100. They have changed little since April. I am more interested in the 'easy trade' in 1040s to 1070. It gets more tricky in the second subrange.