Yesterday’s S&P 500 futures session was a total range of 6.00 index points until mere minutes before the close, then it extended all the way to 6.50 index points complete. If that was not the narrowest intraday range for 2014 yet, it was damn near such.
Usually when these micro-range sessions complete, the very next day is an abrupt and straight-line plunge soon after the open. That behavior has repeated itself many times thru the past few years. Congestive wedged session one day, abrupt selloff slam the next morning.
Anything is possible at any given time inside any financial market. For all anyone knows, stock indexes could keep on melting upwards for the rest of this week or beyond. But we will be prepared for a potential correction or reversal of this recent multi-session grind higher. If the charts turn bearish today, odds of probability are that substantial downside potential exists for short positions in that scenario.
For more daily updates from Austin, visit his blog at Coiled Markets.