The pattern for tomorrow calls for a flat open and mildly higher prices for the first 15 minutes to half hour. This should be followed by a sharp move lower into the 11am to 11:15am time frame.
From here we should look for a consolidation of the losses and a sideways pattern that leads into another sharp move lower starting at 12:45pm. This move lower should continue until 3:00pm at which time the market should stage a very nice come back rally of roughly 50% of its daily decline.
Short term traders can use the above template for prices as they see fit.
On the intermediate term front, the chart below continues to show a slowing of upside momentum and quite possibly the start of a very steep sell off starting tomorrow. We have a very negative stochastics pattern that still needs confirmation by turning lower and we also have a very negative two day trading pattern with 2 polar opposite days.
Remember also that Monday had the greatest odds of being the ONLY up day this week so a negative tone may be set for the week. Remain very defensive in your equity holdings with no more than 45% invested into stocks.
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