Now What?

So we have a 300 point down day and breaking us to the downside of the tight range we had been trading within.  We have had bearish diversion over the last few months and it looks like it finally caught up with the market.

On the weekly, Friday's move has taken us down nearly to prior congestion areas, Just as many stocks re-test breakout points, it appears that the indexes are doing so as well. The bull case would call for a bounce off these levels---  I Don't think this scenario can be discounted and although there may be more down side,  I think it is more likely to find support than engage in a more long term sell off.

The concern has to be with the volume  surge and closing on the lows of the day.

Game plan:

So we have  two scenarios:
1:  More selling  and a bear leg that pushes through prior congestion areas ; or
2:  BTFD returns and we get a bear trap.


Either way I think market conditions are not particularly well suited for trading with conviction and its best to wait until things quiet down.  There is no need to be a heroes.

Money can be made very quickly when the markets line up.


Select Commodities:

OIL: looks to be forming a trading range.  This strikes me as a non-trending market.   What is interesting is there has been a lot of strength in the oil exploration companies.  If oil breaks out to the upside some massive winners may be created in stocks like CRK, PXD, AREX, REN, RICE.  WPX, FANG,

EMES, HCLP

Coffee:
Worth keeping an eye on:

GOLD: Still in an up trend and just flagging.  Let't see if range tightens while we wait for the 30 week to catch up.   Breakouts can be bought out of the flag.