What a wild morning! I guess with all the success the bears have been having, the bulls had to take their revenge at some time or another. What remains vital is the horizontal level I’ve drawn below. We still have a beautiful setup.

(Click on image to enlarge)

I would also like to point out an intriguing “pattern within a pattern” on the Dow Transports. Look at this diamond pattern forming on the IYT:

(Click on image to enlarge)

Taking a big step backward, you can see the same highlighted zone within the larger context.

(Click on image to enlarge)

For myself, I’ve definitely dialed back risk based on the instant 400+ point explosion on the Dow early this morning. I’m at 175% committed, down from 200%, and I’ve tightened up stops on all my positions.

Disclosure: None. 

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