During Friday’s drop (which the media is characterizing as some kind of historic plunge, even though it was like 1.25%), the levels at which the equity futures slammed on the brakes was quite interesting to me.
For the /ES, I drew a line months ago anchored to the prior lifetime high (red arrow). On Friday, at the worst part of the drawdown, the /ES nailed this line almost to the penny and reversed higher (green arrow). It has pretty much undone Friday’s drop already.
The /NQ pulled almost precisely the same stunt.
The small caps (/RTY) are a horse of a different color. In this instance, instead of obeying a former high as support, it used the Fibonacci. The 76.8% retracement is at 2150, so slip me into a pink taffeta dress and call me Peaches, the low on Friday was 2148.60.
These levels need to break in order for bears to enjoy even a brief victory dance.
