10/13/2014 2:13:37 PM
Below is a daily chart of the e-mini S&P 500 futures contract, which represents the S&P 500 index. We can see that as of today, the market is testing a long-time area that it has reacted to many times in the past, both as support and resistance. Today's pause in the downward movement shows that price is once again reacting to this level. Will price hold above this level, or break lower?
The market breaks through support and runs down hard during the last hour before the close of the stock market. This is level of volatility is certainly unexpected given that today is a U.S. bank holiday (Columbus Day) when there would normally be only light trading, but teaches an important lesson: The market is under no obligation to do what you think it should at any time.
After an early morning bounce off of the major price level, price stabs lower and closes strongly below support: