Are You Not Contained?

Headed into the New York lunch hour, stocks are off session lows and not necessarily the bloodbath which could have materialized, given the action overnight. And, yet, bounces have been contained for now, with sentiment largely consisting of traders waiting with bated breath for the seemingly inevitable snapback rally. 

Nonetheless, the true test will be staying objective in assessing the very nature of how this particular market reacts to short-term oversold conditions, since it is the hallmark of a fresh new downtrend to commence by remaining stubbornly oversold for quite some time. Alternatively, recency bias and the price action in recent years has typically seen the immediate snapback rallies, even "V-shaped" recoveries back to new highs. 

But every moment in the market is unique, to paraphrase the late Mark Douglas. And therefore the current market could easily take on its own unique nature, regardless of what we have seen of late. 

Also note the S&P 500 Index's 10-minute chart of the ETF, below. 

Since yesterday afternoon, combined with this morning's gap lower, we have morphed into a large triangle consolidation, of lower highs but higher lows (light blue lines) on this timeframe. I suspect this pattern and chart should give us a good frame of reference for the rest of the day and perhaps week, in terms of how it resolves. 

I will cover plenty of more ideas for Members in my usual Midday Video.