The market tanked hard in the morning, making a new lower low, but then allied up to above morning high, closing near the high of the day for both NQ and ES, now two consecutive consolidation days following a large down-day on Monday
There can be 2 or 3 consolidation/pullback days following a large trending down-day.
-- If the market only needs 2 consolidation/pullback days then Thursday should be a trending-down bearish day closing near the low of the day.
-- If we need another consolidation/pullback day, to make it 3 days in a row, then Thursday will be another consolidation/u[p days,
Key inflection price level for Thursday is 3455 for NQ and 1746 for ES.
-- Above key inflection price level implies another consolidation/pullback up day. Resistance for NQ are 3480 - 3490, and 1751 - 1755 and 1762 for ES.
-- More selling below key inflection level, with first target below Wednesday swing low.
Latest Investor's Intelligence Bull-Bear Spread report is still showing there is more room for the market to drop lower.At the last pullback low the reading was about 13.4%, current reading is still around 30%, so there is still some room for the market to go lower before the we can expect the low.
At the 2010 and 2011 pullback low, the reading went into negative 10 before the market found a bottom. Here is the latest chart showing Bull-Bear difference.
