Yesterday's move lower began during the European session, driven by the financials as CDSs in Deutsche Bank spiked due to concerns on their debt servicing ability and credit markets continue to creek. The extended down move during Globex saw the market get very short in the day time frame, which saw an aggressive short covering move in the last hour.
Volume was high at 2.67m on the session and the second highest volume on NYSE this year at 5.6bn shares. It was the lowest settlement of the year at 1852.00 and a new low for the month at 1821.75, not far from the year low at 1804.25.
Overnight the range is currently 1827.25-1856.75, making new lows as I write. Volume is high and cumulative delta is currently around -23k, showing aggressive selling before the open. This is also the sign the market has got very short pre-open, so if we do see a rally back above the overnight VPOC (currently 1835.00), we may see a fast short covering move. However, all longer time frame trends are lower (monthly, weekly & daily), so I'm going to patiently wait for shorting opportunities until things look too stretched to the downside.
Zones I'm using for today are below with my primary focus on short bounces. Above yesterday's RTH high (1855.00) we have a range gap up to 1865.75