The market performed as expected today, although not exactly as per the script. Most of the selling happened overnight. The market opened with a down gap but then rallied since then. The rally was muted, however. It was a bit surprising to me since we had a newsless environment and negative sentiment. As we can see, the market, however, bounced at 50% fib retracement, and that seems to be working as a support.
Tomorrow, I expect a choppy market with a bit more upside at the end of the trading session:
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Again, do not take it as a prediction of what will happen. The market may react completely differently. I use math to perform trend forecasting based on past data. Trend forecasting may work very well in a solid environment within a given trend, but we currently do not have it. We have an erratic, choppy, and sentiment-driven market. And in such an environment, forecasting may not work well. Other tools must be used to confirm the trend (which is again difficult in today’s market).
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