On the 45 minute chart for the TF:

Click on image to enlarge!

We can see a clear Gartley support pattern in place from the current target extension at 799.50 (met yesterday) to the second target extension at 788. That second target also overlaps a key .786 price retracement from the June 16th low to the July 7th high. Since a break of that level would target all the way down at 743.90, the green extension of that same low to high, this support area is significant. If yesterday’s low holds, the next major challenge in the way of additional upside is the 100 percent price projection of the July 18th low to the July 21st high, projected upward from the low established yesterday. That level defines the rhythm of the downtrend and a break would violate the concept that we’re just seeing a bounce before another drop.

Should the move to downside continue, while the key resistance area would need to be recalculated, let’s keep in mind that the stronger support level is still intact at 788. It would take a break of that level to call the deeper downside target into play. I’ll keep this chart updated each morning on my site’s chart of the day page so we can track the progress of this pattern. These levels are the same on a daily chart. It’s just easier to see the pattern on the 45 minute.

For more from Mark including his “Chart of the Day”, visit MJBraun.net.