Well the back and forth game between buyers and sellers in this consolidation range looks to have come to an end with what is looking like a 20+ point drop during the globex session last night and into this morning. The longstanding level of 983 was tested and appears to be a spot where buyers are defending price. When levels are defended it acts as confirmation that my assessment and calculations of the patterns are indeed valid.
Going back to Thursday's close and Friday's price action, My comment that it 1016 was going to be tested was not a statement of fact. It had already been tested in the overnight session (a test by proxy*) what remained was just a test of that level during the cash session (9:30-4:15). Friday's afternoon rally again came too late and didn't do enough damage to the chart to give buyers any control.
The result of this last 1/2 hour of action on Friday acted as a slingshot for sellers and propelled price action through the much tested 990-991 straight down to the 983 level. Given how much buyers protected 990-991 my assumption is that 983 is not going to be as sticky. Next Stop 965.
Sellers start losing control of this attempt to break lower by not defending 998. Any close above 998 and this can be deemed yet another probe of the 991 area and would indicate that when 1007 breaks, it is to start a new market rally.
* testing by proxy means that the price action got close enough to the high to be considered a test of the actual high without actually touching it
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