We saw absolutely out-of-this-world volatility come into the market on Tuesday, and it closed with a massive lower wick. What happens tomorrow should be very telling.
If we see a gap down and buyers step in aggressively, pushing the market to a bullish close, that would increase the odds that a more durable low is in place. The same is true if we gap higher and finish the day strong.
However, if we gap down and buyers fail to show up, we are likely in for another round of volatility. And if we close below Tuesday’s wick low, it would suggest that more hard and fast selling is likely ahead. Watch the low that was put in on Tuesday very carefully, that is the new level that the bulls need to hold.
