“Human emotion is both a source of opportunity in trading and the greatest challenge. Master it and you will succeed > Ignore it at your peril.” – Curtis Faith

As discussed in our latest weekly outlook video, despite the fact that markets were trading heavy and that we expect a retest of yearly lows, markets tend to not only move in one direction for a sustained period of time. Two-way action is healthy and participants should not be surprised to see a bounce that could make it back to the 50DMAs. So far, no change in outlook, the levels are set and we have to let the market play out.

The only comment we would like to add it that recent moves to the downside have been a lot more orderly that the squeeze we witnessed yesterday. From our experience, even if this kind of squeeze action tends to always surprise as to how aggressive and sustained it can be, ultimately, they tend to give it all back. The velocity of moves is the real tell… There are a lot of factors in play but in our opinion, the underlying action is not that of a strong market but rather continues to be that of fragile squeezes in a market that still has unfinished business at lower levels.

We will discuss this in a lot more detail in today’s session.

As always, there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.

Wishing you a great day ahead.