Below is a Daily chartgrid of the YM, ES, NQ & TF. Relatively-speaking, the Dow is holding up better than the other 3 as it closed on its 50 sma (red) and mid-Bollinger Band today, while the others closed below. In keeping with my "mean" theme from yesterday's post, the YM returned to its "mean" (50 sma), while the other 3 moved away and below.
Below is a 4-hour chartgrid of the YM, ES, NQ & TF. Price continued its downward trek on this timeframe and put in a lower swing high and low...moved away and below its "mean"...and closed at its lower Bollinger Band. My short-term RSI readings are a bit oversold, so price may bounce somewhat from here, or pause.
Below are 4-hour charts of the YM, ES, NQ & TF. My post of November 30th referred to a "Golden Fibonacci Sweet Spot": http://strawberryblondesmarketsummary.blogspot.com/2011/11/golden-fibonacci-sweet-spot.html
It's a confluence of numerous Fibonacci retracement and fanline levels...it was my opinion that these markets would need to hold above this level on any pullback if I was to be convinced that the rally that week was sustainable in order that we could see them reverse the bearish moving average Death Cross formation that was present then on this timeframe, and on the Daily timeframe.
Since then, the moving averages have moved into a bullish Golden Cross formation on the 4-hour timeframe for all 4 e-minis, and on the Daily timeframe for the NQ. While price has, so far, held above the "Sweet Spot" for the YM, it has been substantially penetrated on the other 3 e-minis. Additionally, price has fallen back into the "Thin Ice Zone" on the ES, NQ & TF, which is the high and low of the daily candle from August 5th...the day that Standard & Poor's downgraded the U.S. credit rating...since that date, the markets have gapped up and down a lot within this zone and there is much weakness and volatility within.
Inasmuch as the YM is holding up the most on this downdraft, and since the Financials sector, XLF, held up and actually closed in the green today, as shown on the Daily chart below, I'd be looking for either a demonstration of increased weakening on these 2 to continue shorting the TF, or a slowing (and reversal) of downward momentum on the ES, NQ & TF to possibly consider going short-term long.
The 1-day 1-minute comparison chart below shows how XLF was propped up today, relative to the Major Indices, and Commodities.
The VIX closed above the 25.00 level again today, as shown on the Daily chart below. As long as it stays above that level, I'm wary of going long on the TF on an intraday basis.
As long as the "flight to safety" money flows into the U.S. $, it appears that the equity markets will continue to fall...it may reach a level of 82.325ish (+2 deviation level of uptrending regression channel), as shown on the Daily chart below, before pausing.
In conclusion, if the markets were to turn continue falling, I'd be looking for a bearish cross, once again, of the 50 sma below the 200 sma on the NQ on the Daily timeframe, as well as the re-formation of a bearish moving average Death Cross on all 4 e-minis on the 4-hour timeframe, as a confirmation of the resumption of the bear market...if that were to happen, I think these markets could weaken quite quickly and fall quite rapidly (without any QE intervention from the Fed...and the ECB in the European markets). And, it's quite possible that the lows of 2011 will be broken. As long as the Commodity markets continue to fall, I think it would be difficult for equity markets to rally.