On the attached chart we are testing the first VPOC (Volume Point Of Control). If the market can’t get through here, it is in trouble I think, but the jury of buyers and sellers will decide that as the week unfolds. If the buyers can’t grab a foothold above Friday’s lows, then the next leg down won’t be as orderly.
My view coming into Monday was that buyers would indeed grab that foothold. And they did that Monday, but they need to build a base here. I don’t have any analysis to back this up, but there was something about Monday’s trading that didn’t feel good. If we fail, it is going to be a lot nastier than the orderly decline of the last few weeks. If we can manage to stay afloat in this area, we could have a decent rally. So this week is important. I expect to have some positions on before the end of the week, one way or the other. Which direction that will be, not sure yet.