Our last formal update forebode the breaking of the long term bullish channel on the S&P 500 cash index around the 2020 level and looked ahead to what could be the next levels of support. 2000 did not provide any support & subsequently 1980 did not either. For the S&P 500 futures market, the open on Sunday August 23rd was yet another gap down & immediate breach of 1960 ES, which was a major support shelf. This action pointed to a possible extreme scenario which subsequently played out in the overnight session. It is important to remember that when hyper trends end in either direction, like the one which ended with the breach of the long term weekly SPX chart (attached), an equal or greater acceleration in the opposite direction is highly probable.
Monday August 24th cash open was one for the record books as the DOW opened down over 1,100 points & the S&P 500 futures index was 'lock limit' down prior to open. As you'll see, the market found it's first level of long time support & then proceeded to put in a wild ride of intraday volatility which is shown in the additional SPX chart & contains near term potential inflection points if the market is to resume an immediate downtrend. The first obvious level is the downtrend channel.
Please adjust trading approach to factor in the volatility expansion when taking position sizes or your trading will also experience 'risk expansion'. Stay patient & disciplined.
As always, please continue to monitor the Market Structure Projections via our blog at http://mcm-ct.com/blog/public/ and stay nimble in this market environment. Good Luck to your trading
These are key MA levels: 2077 (200sma) - 2095 (100sma) - 2086 (50sma) - 2052 (10sma)
These are key support and resistance levels: 1867 - 2040