(click image to enlarge chart)
The contracting VST/ST triangle was broken at 1302.75 (see previous chart and post) and the pros have raided the accumulated bull stops under 1287.50
So far, so good on the initial breakout move to the edge of the previous trading range (1287.50 – 1338). The initial push down stopped exactly at the 1278.50 line drawn on the previous chart to complete a Bear 1 pullback to intermediate primary trend support.
What matters now is how price reacts at the key number of 1287.50…
If the plan is to run the bull stops and reverse―that line at 1287.50 is where the pros will cover and reverse from the initial countertrend sell signal at 1338 (1343 on March contract). There are, no doubt, ample sellers that will emerge as those bull stops are run on the weekly timeframe―and those are the guys the pros want to shake out to free up contracts/shares at bottom-dollar prices.
On the other hand―under 1287.50 is undisputed bear territory and if no recovery rally emerges after the bull stop run, there is a support void (the same one that stopped the initial pullback on 2/24) down to 1258.75 where a decline could accelerate rapidly.
So…for now, the intraday bull/bear line is 1287.50