According to our model, the markets reached (for the second consecutive day) intraday panic level.

When reaching these levels, there are only 2 solutions: a bounce back or a huge selloff.

This is why we need to be highly vigilant when buying such situation and we need to use tight stop loss (SL). (Usually we place it few points below the intraday low).

In this context, you can easily understand why we placed our 1st SL at 1345, and why our current position has a SL at 1340.

There is no huge change in our model:

Conclusion:

We continue to believe a short term bounce back is on the agenda and the market should retest the zero line (from our indicators) in coming days.

If this scenario doesn't materialize quickly, and if we break the 1335 level, we will go short because a huge selloff will probably be on the agenda (due to 2 failed bounce back attempts).

Have a nice day,