Posted 7:34 am PST. I posted the chart below after the close.
The market is deciding if the selloff will be a spike followed by a bear channel, or if it is simply a buy vacuum test of yesterday’s low and a large high 2 buy setup. The reversal up at 7 am is a possible low of the day, but the probability was low until there the 7 bar bull microchannel at 7:25. At that point, there was disappointing follow-through for the bulls and bears so the day will probably be in a trading range for at least a couple of hours. We might have seen both the low and high of the day. The rally is big enough to reduce the chances of a big bear trend day. Big down and big up usually means big confusion and then sideways. When there is confusion, bulls tend to scale in near the bottom and bears tend to scale in on any rally. Both tend to scalp, and the result is usually a trading range.
The market might decide between trend resumption down and trend reversal up late in the day after the trading range becomes clear.
This reversal down is a lower high major trend reversal on the 60 minute chart and it is occurring at the top of the weekly channel. It might be the start of a pullback on the weekly chart.