Last night, as posted in the "lounge", the market action was distinctly that which we have not seen since the 2007 and 2008 era. Yesterday, to the dismay of many to be sure, the Dow Jones Industrials Index, for no apparent reason, spiked 65 points in 30 seconds and reverted almost the same amount in another 30 seconds. Clearly this was a transaction under duress. Additionally, the impact of this could have transmitted emotional fear to the remaining equity markets, however, the behavior among all equity markets, was not constructive. Moreover, we have been sitting since Friday in pending cycle setups on the daily charts. Today, the dark magenta dot on the daily cycle chart for ES indicates that the cycle will now print. The price at which the cycle will print has not confirmed, therefore, it is shown dark. However, do not let the applications of the cycle be lost on you. This is a significant event and implies 70 to 100 points down in short order. If it is to be saved by another cyclic support cycle, then one will need to appear similar in fashion to the end cycle shown on the chart below. This does not need to occur - the market can make a much larger swing lower if it so decides. However, from a structural perspective, probabilities do favor that a near-term drop is likely be supported and probable to attempt a rally into early November. Any such rally can begin from significantly lower levels and result in a lower high is easily as it can result in a better retest of the cycle impulse levels in higher highs.
Note, also, that the weekly chart now has confirmed a more bearish potential setup than we were previously monitoring. Firstly, the weekly chart generated LRE triggers which are indicated by the red dots at the top of the last two weekly bars that completed. These indicate a propensity for downward reversion and a lower risk potential entry for such a position. There was a potential for the weekly chart to print a bearish retracement at the conclusion of the impulse we test. Given the nature of the impulses at this present time, it is unlikely to get such a BR (bearish retracement) to print on the charts until the market has put more effort in. We have rendered one example, though there are few other potentials, of how the dissipation phase of this impulse cycle may begin on the weekly chart.
Last point, notice that the complete cyclic cycle maneuver on the daily chart was matched by completed impulses upwards on the 135 minute chart which also has a fractal relationship to the 60 minute chart impulse cycles.