We personally think it was overdone and as the chart below clearly shows, we're getting close to some major support levels.
On top of that, our filters indicated that there was a lot of buying the whole way down.
We're going to see how long it takes for this one to "level out" and won't be shy about grabbing some for the inevitable rebound.
As far as the overall market goes, today we once again saw some "snap back" activity.
The million dollar question is whether this is a dead cat bounce or a set up for the next bull leg.
If we knew this answer, we'd be writing this from a 200' yacht off Cabo San Lucas.
What we can say with certainty is that the volume has been relatively anemic for the past few sessions.
Additionally, as the bottom chart(15min Dow) shows, today's action is almost a perfect 62% retracement of the Monday-Wednesday swoon..hmm
So, that data along with what we might be a bottoming of the VIX(finally?), has us leaning slightly toward seeing another test of the lows in the coming sessions.
If so, and we get some early evidence of that scenario, there might be a very rewarding opportunity to snag some more CVOL at it's low levels.
Anyway, one day at a time..right now we want to see indication of interest in this market..either bullish or bearish as that's what's going to drive the best risk/reward opportunities..