Although the Emini S&P 500 plunged beneath the lower-support boundary line of its Apr-Jun price channel at 2070 and then followed through to the downside to slice beneath a cluster of its prior significant June pivot lows at 2061 to 2062, the selling pressure managed to abate just north of the most critical recent low at 2050 established on May 7.

Purely from a technical perspective, the fact that the index recovered sharply after a near 1% penetration of its lower-channel boundary is the first sign of a potentially meaningful low in progress.

That said, given the ongoing headline risk, we cannot and should not rule out another swoon or two in the upcoming hours that retests the overnight lows. If the tests are successful, then the likelihood that the e-SPU has put in a significant corrective low increases substantially.

Originally published on MPTrader.com.