OK Guys. Go back and look at the 10 min chart I did last night. It will show you the importance of making, at least, an educated guess of where the likely channel lines will be.Now look at tonight's 10 min chart. I have drawn in 3 lower channel lines with the benefit of hindsight. If I chose any one of them last night, how wrong would any of them have been? This leads on to an important issue. In drawing trend lines, people will say I do it wrong, it has to be done so and so way.The general consensus is that lines should all touch highs or lows. Wrong. You should take a "best fit" and take one line, support OR resistance, whichever one has the best fit or most "probable" touches. From this, draw the opposing line parallel. 9/10 you won't be too far wrong. My estimate of support at 380 wasn't that far out, considering the move of 140 + points.Close enough to have the confidence of an expectation of a bounce/reversal/stop at that point. So in that area I know to look for a close on a short. Again, I must stress, that does not mean a reversal.. The Dow has a nasty habit of consolidating at tops and bottoms, when we're all looking for a reversal.
When the market has violent moves, don't bank on the magic numbers working too well. Nothing can stand in the way of a mud slide! Next horizontal support down is 300. That ties in with my bear flag target mentioned earlier....That target is cancelled. For now. Still not a lot of room in RSI for upside. Resistance is at 59 ish... For upside, we have to get back 432, then 464 and then we'll be at channel resistance. In case I need to spell it out, we're in a down trend....
