Here is an updated version of the point and figure chart I showed you in an earlier post this morning.After a breakout from a base the market might sink back into the base a little and often will react to the descending trendline you see on this chart. So I regarded a reaction to the 890 level as perfectly normal. But when the e-minis dropped to 888 the sideways action near today's high now looked like it could support a drop to 886, a new low for the day, and thus negate the earlier bullish indication of this chart. Once I saw this the only logical thing to do was dump my long position.
Now what? Frankly, I can't even make an educated guess. Whoops! The market just broke further so I just shorted a unit at 885. This now looks like a downside breakout. So I am back to the view I held this morning - the reaction will probably continue to 865 or so. Today's range is likely to be 875-895
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