Tuesday, October 23, 2012

S&P 500 ~ Pre-Market ~ 23 October 2012

The futures sold off overnight and we're currently below yesterday's low!

Yesterday's daily candle looked actually very bullish but as I said yesterday, I'd like to see a rally above 1435 first before going long. And below you can see the reason I remained cautious yesterday:

Here you can see a very similar setup: A big reversal at a strong support level and a very bullish candle. The day after the SPX opened lower and declined 60 handles!

Thus, if we break yesterday's lows (during market hours) and stay below it, we could see 1400 very quickly.