Submitted by Nic Lenoir of ICAP
We saw the 100-dma on the Dax on the lows, which was the last push we expected short-term. In S&P future we made new lows, though barely. Intraday we triggered a double bottom at 1,035 on the S&P futures, and we have started seeing divergence on the lows. Copper has been struggling to sell-off along with other risky assets today, Gold was up all day even with equities on their lows, and USD crosses haven't made new lows either. My original inclination was to see 1,012/1,020 before any reasonable corrective rally in both time and size would happen, but given the price action today I see the set-up for a rally to 1,052, and possibly 1,070.5 depending if we have or not finished the 5 leg impulse from the tops. I will watch very carefully the price action around 1,065/1,070 if we get there as I believe the market will present there a great opportunity to initiate fresh shorts.
Good luck trading,