The action today is particularly damaging to the near term rally case. The worst outcome would be if markets close at the low of the day. During market corrections and bear markets, when markets close at the low of the day on Thursdays, the following Friday also tends to selloff and sometimes severely. On the other hand, the next two days are seasonally bullish, but I am not sure that means much right now.
If the Qs break below 43, the SP500 below 1080 and the Dow below 10,000, I think the selling will intensify until the 200demas are hit, currently around 41, 1045, and 9750 respectively. If the above levels hold today and tomorrow, then we should see a relief rally over the next few days, which will be an ideal opportunity to increase short exposure.
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